Why You Can’t Find The Doctor You Need

Blue Cross in Dallas, for example, pays some doctors 10% less than Medicaid’s fee

John C. Goodman ,


I offer market-based healthcare solutions.

Opinions expressed by Forbes Contributors are their own.

Long before the first enrollee signed up for an Obamacare plan, I predicted a race to the bottom – in which insurers would try to attract the healthy with low premiums, made possible by narrow networks that leave out the best doctors and the best facilities.

In a properly functioning market place, the suppliers of services will compete on price, quality and access. But if the competitors face perverse incentives, you will get perverse outcomes. If health insurers have perverse incentives to attract the healthy and avoid the sick, they will compete on price – at the expense of quality and access for the patients who most need care.

Experience is bearing my prediction out.

new report from Avalere finds that the average provider networks for plans offered on the (Obamacare) health insurance exchanges include 34 percent fewer providers than the average commercial plan offered outside the exchange.

Specifically, the analysis finds that exchange plan networks include 42 percent fewer oncology and cardiology specialists; 32 percent fewer mental health and primary care providers; and 24 percent fewer hospitals. (See the chart below.)

Researchers at the Leonard David Institute of Health Economics approached the same issue in a different way. They categorized network size into five groups: x-small (fewer than 10% of the providers are participating), small (10% to 25% are participating), medium (25% to 40%), large (40% to 60%), and x-large (more than 60%).

Given those categories, the researchers found that more than 40% of networks can be considered small or x-small, including 55% of networks in HMOs and 25% of PPO networks. (See the table below.)

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