As agents, we often tout a carrier's broad network of providers as a selling point. The idea is that switching insurers doesn't have to mean finding a new primary care doc, or leaving one's favorite cardiologist. It's always been a case of "bigger is better."
But is it?
Sometimes, as in the case of Sutter Health, one provider network can drive costs up while simultaneously reducing choice. But hospital chains such as Sutter's aren't the only model:
"Thousands of employers ... are opting for 'narrow network' HMOs, which offer notable savings on insurance premiums but also offer fewer medical providers."
In this case, by reducing access, it's hoped that insurance claims costs (and hence, premiums) can also be reduced. This makes a lot of sense: choice costs. That is, more flexibility means more admin costs, which are in turn passed on to the insured.
One key question left unanswered here, of course, is whether reducing "choice" also reduces "quality." One supposes that time will tell.
But is it?
Sometimes, as in the case of Sutter Health, one provider network can drive costs up while simultaneously reducing choice. But hospital chains such as Sutter's aren't the only model:
"Thousands of employers ... are opting for 'narrow network' HMOs, which offer notable savings on insurance premiums but also offer fewer medical providers."
In this case, by reducing access, it's hoped that insurance claims costs (and hence, premiums) can also be reduced. This makes a lot of sense: choice costs. That is, more flexibility means more admin costs, which are in turn passed on to the insured.
One key question left unanswered here, of course, is whether reducing "choice" also reduces "quality." One supposes that time will tell.
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