Let consumers decide if they want narrow networks


On Thursday, we wrote that former U.S. Health & Human Services Secretary Michael Leavitt said the Obama administration must find simple solutions to the complex problem of exchange enrollment.

In that same interview with Kaiser Health News, Leavitt also said narrow networks aren't always a bad approach to health insurance. That's because some consumers would simply prefer lower premiums; to get those less expensive costs, they're willing to sacrifice provider choice.

In fact, if this country hopes to achieve real healthcare reform, meaning healthcare spending makes up a smaller percentage of the total economy, "consumers have to have the ability to make decisions for their own best interest," Leavitt said. "Without that choice, people will become discontented."

The bottom line, according to Leavitt, is narrow networks help reduce costs. "If you require everyone to have everything, then costs will continue to go up," he said. So they should at least be presented as an option to consumers. "I'm not suggesting everyone should have a narrow network, but [people] ought to have choice based on their own priorities."

That's not a popular sentiment among some health industry analysts, who fear insurers' recent tendency to use narrow networks will sacrifice consumers' existing relationships with their doctors and hospitals. Some experts also worry that narrow networks could drive up costs. And due to public backlash against more insurers contracting with fewer providers, insurance regulators in some states are blocking efforts to thin networks.

But insurers claim that by limiting their networks, they can offer health plans with more efficient providers, thereby cutting costs while also improving care.

Leavitt isn't claiming strong allegiance with either side; he's making a case for a health insurance market that includes options. Let the consumers decide what the consumers want. As long as there are health plans with both narrow and broad networks offered on the marketplace, consumers can make a decision that best suits their particular needs and circumstances.

It's very possible that cost-conscious marketplace shoppers may accept the tradeoff of less choice for lower premiums, if that's their choice. And they certainly should have the option to do so.

A problem, however, arises when the scale is tipped in the favor of narrow networks. A recent study shows about 70 percent of hospital provider networks on the exchanges are either narrow or ultra-narrow. That seems unnecessarily excessive--and removes choice from consumers. Just like car shoppers have the option to buy or lease a car, folks looking for health insurance coverage should be able to decide whether they want access to more providers or whether they want to save some money.

Leavitt said the Obama administration should find simple solutions to the complex problem of exchange enrollment. I would argue that granting consumers a choice in what their health insurance coverage looks like and costs is the simplest way to ensure everyone in the market is happy--as long as both narrow and broad networks are available, of course. - Dina (@HealthPayer)