Insurers Push
Plans Limiting Patient Choice of Doctors
Published: July 17, 2010 - New York Times
As the Obama administration begins to enact the new national health care law,
the country’s biggest insurers are promoting affordable plans with reduced
premiums that require participants to use a narrower selection of doctors or hospitals.
The plans, being tested in places like San Diego, New York and Chicago, are
likely to appeal especially to small businesses that already provide insurance
to their employees, but are concerned about the ever-spiraling cost of coverage.
But large employers, as well, are starting to show some interest, and
insurers and consultants expect that, over time, businesses of all sizes will
gravitate toward these plans in an effort to cut costs.
The tradeoff, they say, is that more Americans will be asked to pay higher
prices for the privilege of choosing or keeping their own doctors if they are
outside the new networks. That could come as a surprise to many who remember the
repeated assurances from President
Obama and other officials that consumers would retain a variety of
health-care choices.
But companies may be able to reduce their premiums by as much as 15 percent,
the insurers say, by offering the more limited plans.
“What we’re seeing is a definite uptick in interest because, quite frankly,
affordability is the most pressing agenda item,” said Dr. Sam Ho, the chief
medical officer for UnitedHealth’s health-care plans.
Many insurers also expect the plans to be popular with individuals and small
businesses who will purchase coverage in the insurance exchanges, or
marketplaces that are mandated under the new health care law and scheduled to
take effect in 2014.
Tens of millions of everyday Americans will buy their coverage through those
exchanges, a vast pool of new customers, including many of the previously
uninsured, whom insurers expect will be willing to accept restrictions to get a
better deal.
“What this does is eliminate the Gucci doctors,” said Peter Skoda, the
controller of the Haro Bicycle Corporation, a Vista, Calif., business that
employs 30 people. Facing a possible 35 percent increase in its rates, Haro
switched to an Aetna
plan that prevents employees from seeing doctors at two medical groups
affiliated with the Scripps Health system in San Diego. If employees go to one
of the excluded doctors, they are responsible for paying the whole bill.
“There wasn’t any pushback,” Mr. Skoda said. Haro’s employees are generally
young and healthy, he said, and they rarely go to the doctor. Instead, they want
to make sure they have adequate coverage if they go to the emergency room.
The company’s premiums average $433 a month, Mr. Skoda said, with employees
paying one-fourth of the expense. A few employees opted for more traditional
coverage, enabling them to go where they please. But they are paying
significantly higher deductibles and out-of-pocket costs that could add
thousands of dollars to their medical bills.
The last time health insurers and employers sought to sharply limit patients’
choice was back in the early 1990s, when insurers tried to reinvent themselves
by embracing managed care. Instead of just paying doctor and hospital bills,
insurers also assumed a greater role in their customers’ medical care by
restricting what specialists they could see or which hospitals they could go to.
“Back in the H.M.O. days, it was tight networks, and it did save money,” said
Ken Goulet, an executive vice president at WellPoint, one of the nation’s
largest private health insurers, which is experimenting with re-introducing the
idea in California.
The concept was largely abandoned after the consumer backlash persuaded both
employers and health plans that Americans were simply not willing to sacrifice
choice. Prominent officials like Mr. Obama and Hillary
Rodham Clinton learned to utter the word “choice” at every turn as advocates
of overhauling the system.
But choice — or at least choice that will not cost you — is likely to be
increasingly scarce as health insurers and employers scramble to find ways of
keep premiums from becoming unaffordable. Aetna, Cigna,
the UnitedHealth
Group and WellPoint are all trying out plans with limited networks.
The size of these networks is typically much smaller than traditional plans.
In New York, for example, Aetna offers a narrow-network plan that has about half
the doctors and two-thirds of the hospitals the insurer typically offers. People
enrolled in this plan are covered only if they go to a doctor or hospital within
the network, but insurers are also experimenting with plans that allow a patient
to see someone outside the network but pay much more than they would in a
traditional plan offering out-of-network benefits.
The insurers are betting these plans will have widespread appeal in the
insurance exchanges as individuals gravitate toward the least expensive options.
“We think it’s going to grow to be quite a hit over the next few years,” said
Mr. Goulet of WellPoint.
The new health care law offers some protection against plans offering overly
restrictive networks, said Nancy-Ann
DeParle, head of the office of health reform for the White House. Any plan
sold in the exchanges will have to meet standards developed to make sure
patients have enough choice of doctors and hospitals, she said.
Ms. DeParle said the goal of health reform was to make sure people retained a
choice of doctors and hospitals, but also to create an environment where
insurers would offer coverage that was both high quality and affordable. “What
the Congress and the president tried to accomplish through reform is to
transform the marketplace by building on the existing system,” she said.
But most of these efforts have been limited to a small number of markets. How
widespread these plans will become is anybody’s guess, and some benefits
consultants wonder if these plans represent any real solution to high medical
costs. The narrow network, if it is based on the insurers’ ability to demand low
prices, may be “just another short-term fix,” warned Barry Schilmeister, a
consultant at Mercer.
What’s more, no one is predicting a wholesale return of the classic H.M.O. as
an employee’s only option of health plan. “We went through the choice battle
with the managed care wars,” said Andrew Webber, the chief executive of the
National Business Coalition on Health, which represents employer groups that
purchase health care.
A lot has also changed in the last 15 years. The average premium for family
coverage is now more than $13,000 a year, and many businesses have already asked
their employees to pay a much greater share of their premiums and more of their
overall medical bills.
UnitedHealth is experimenting with a more limited plan in California and
Chicago and plans to expand to four or five other markets next year. Patients
are allowed to see a doctor who is not in the network the insurer established,
but they pay much higher out-of-pocket costs than they would in a traditional
plan offering out-of-network benefits.
UnitedHealth is also starting a new plan in San Diego, which was developed
for a collection of school districts, representing some 80,000 people. The plan
creates tiers of doctors, and employees who use physicians deemed to offer
high-quality care at low price will pay the least for their medical care.
Even large employers, worried that the new law will result in higher prices
for care as government programs pay less, are reconsidering their earlier
stance.
When Cigna informally asked some of its clients about their interest in these
plans before the legislation passed, very few were receptive. But that has
changed, said David Guilmette, a senior executive for the insurer.
One way insurers say they hope to prevent another consumer backlash is by
emphasizing that they are not choosing doctors on price alone. The insurers say
they look to see how quickly a doctor’s patients recover from surgery, for
example. But how much the insurers emphasize quality remains to be seen.
But many insurers say they are still figuring out how to persuade people to
choose these plans rather than force them to enroll. “What’s not changed are the
old techniques of black-belt managed care,” said Mark T. Bertolini, Aetna’s
president. “We have to create the same kind of model without the ‘Mother, may
I.’ What we want is the ‘Mother, should I.’ ”