The Skinny on Narrow Health Care Networks

Lots of people shopping in the new health care marketplaces this year picked health plans that limited their choice of doctors and hospitals. The plans were popular because they tended to cost less than more conventional plans that covered nearly every health care provider in a region.

The proliferation of these more limited plans, called narrow networks, has worried consumer advocates and insurance regulators. The concern is that people will struggle to find the care they need if their choices are limited.

Maybe we don’t have to worry so much. A new study suggests that, done right, a narrow network can succeed in saving money and helping certain patients get appropriate health care. The study, published as a working paper with the National Bureau of Economic Research, looked at a program that used financial incentives to steer workers into narrow plans. Those that chose the plans saved their employer money, saw their primary care doctors more and used the emergency room less. That doesn’t mean that narrow networks are the right choice for every health care consumer, but it all sounds like good news for the type of patient who wants such a plan. Done right, a smaller choice of doctors may have some advantages.

What’s encouraging about the program, studied by the economists Jonathan Gruber of M.I.T. and Robin McKnight of Wellesley College, is that its conditions look similar to what we’re seeing in the marketplaces. Massachusetts offered its workers a discount — three months premium-free — if they chose a narrow network plan over a standard offering. Only about 10 percent of the workers took the state up on the offer. Over the course of a year, that group’s health care cost its employer 36 percent less than it cost to cover their colleagues in the traditional plans. Over all, that translated to a 4.2 percent decrease in spending for the whole program.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary