Tag Archives: Health Care Cost

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.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Insurance Giants Join Forces to Create Healthcare Transparency

The public has been demanding healthcare transparency. Finally, three of the largest health plans have joined forces to finally shed light on claims payment data.

UnitedHealthcare, Aetna, and Humana announced they will be working together with the Health Care Cost Institute to focus on healthcare transparency. They will create a payment database that will be available to the public for free.

Experts expect the database to be up and ready to go by 2015 in hopes for open enrollment.

The healthcare cost transparency is being spurred by a number of developments in the healthcare sector. The trends towards high-deductible plans is giving consumers a greater incentive to understand how much healthcare costs and to utilize it more efficiently.

Healthcare transparency has been a large debate in the past year, due to the level of difficulty to get a simple price for a basic health-care procedure.

In 2012, Steven Brill wrote a 26,000-word opus on medical bills for the Time. Not surprisingly, consumers have been picking up more of the tab for their healthcare.

To read more, click here.

Jeffrey R. Ungvary

President

Jeffrey R. Ungvary