The Truth about Narrow Networks and Patient Choice

October 23, 2014

The mainstream press used to relegate ridiculous claims and conclusions to "news of the weird." But, when it comes to patient choice, they are serious debates.

Imagine this: Mooo Brand dairy announces that its milk will only be sold at stores that pay it a price allowing it to stay in business. Within a week, one third of all retail milk outlets drop Mooo Brand, another third tack on big surcharges, and the final third agree to Mooo Brand’s terms and absorb the added cost.

The next day, Facebook, Twitter, local and national television, radio and cable news and the Fishwrap Picayune are awash with stories and pro and con editorials. At their center is the Milk Advocacy and Equality's outrage at the injustice of Mooo Brand milk users’ choice of retailers being restricted, forcing many to abandon their favorite retailer. Milk is a necessity. Babies need it, kids need it, and, what about my Cheerios? They want the same deal across all product lines and dairies.

Absurd?

Truth can be stranger than fiction in today's world.

Consider this: The U.S. Congress passes the Affordable Care Act, which is both insurance reform and a massive expansion of Medicaid.

It mandates that every American become insured or pay a tax, receive and pay for 10 "essential" coverages whether they will ever use them or not, and that all pre-existing conditions be covered. It heavily subsidizes minimal plans and heavily taxes good ones.

Insurers are forced to keep premiums to mandated levels (the "affordable" part). In response, they increase "patient responsibility" payments - deductibles, copays, and co-insurance to compensate. Since "patient responsibility" amounts are limited by law, narrow networks of physicians and other providers form by default because only a few providers will accept the necessary low reimbursements for their services.

President "If you want to keep your doctor, you can keep your doctor, period" Obama, the mainstream press, pundits, and pols from both sides of the aisle, patient advocacy groups, unions, and even Crazy Ed at Joe's Bar, fume, lament, and vilify insurers for restricting "patient choice." HHS, CMS, the DOJ, the FDA, the FTC, and major networks bark and fuss.

But, here's the dirty little secret that is no secret at all: The cornerstone of the law's healthcare reforms are accountable care organizations … narrow networks that restrict choice. And, they are excused from most anti-kickback and similar laws to enforce their monopoly.

What a grand theater of the absurd.