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Effects of Narrow Networks on Access to High-Quality Cancer Care

Effects of Narrow Networks on Access to High-Quality Cancer Care Now, several years since the implementation of the Affordable Care Act (ACA), many insurance policies purchased over the exchanges are offering limited hospital and physician networks, otherwise known as “narrow networks.” A recent study by McKinsey1 demonstrated that 40% of plans include networks classified as “narrow” or “ultranarrow,” meaning that they have contracts with less than 70% or 30% of hospitals, respectively. This may represent a strategy for insurers to control cost by adversely selecting against patients with expensive chronic conditions in response to other portions of the ACA designed to improve access, such as the inability for insurers to limit access to patients with preexisting illnesses, which results in increased costs for the insurers. Additionally, as the increasing consolidation of hospitals and other health care facilities shifts bargaining power from insurers to health care institutions, insurers resort to solutions such as narrow networks to gain leverage in their negotiations with health care institutions over reimbursement rates. Narrow networks may serve as a way for market forces to penalize high-cost, low-performing hospitals and physicians, while encouraging competition based on the quality of care. Previous research has shown that patients with restricted health plans receive coronary artery bypass grafting and kidney transplantation at hospitals with better outcomes than those used by patients with broader network plans.2 However, we believe that narrow networks instead at least partially represent an alternative mechanism for insurers to manage risk profiles of patients with expensive chronic diseases, similar to their use of adverse tiering formularies (eg, putting all human immunodeficiency virus [HIV] medications in the formulary with the highest cost-sharing requirement for patients) to dissuade patients with high-cost diseases such as HIV and rheumatoid arthritis from enrolling in particular plans.3 Patients with cancer are among the most expensive beneficiaries for insurers because a treatment course can include chemotherapy or targeted biologic therapies, radiation therapy, surgery, regular clinic visits, and frequent hospitalizations. We had concern that insurers are beginning to exclude stand-alone cancer centers in the form of narrow networks as a way to dissuade patients requiring expensive cancer care from choosing a particular health plan. To better understand this issue, we sought quantitative evidence from 11 stand-alone cancer centers (Table) that make up the Alliance of Dedicated Cancer Centers (ADCC). We asked representatives from these centers to offer data for several metrics that demonstrated to what extent they were included on insurance plans found on their state’s exchanges. These measures were based on enrollment in exchange plans as of 2014. Table. The Alliance of Dedicated Cancer Centers View LargeDownload We found evidence of exclusion from more than half of all exchange plans in 4 of 11 of these cancer centers: City of Hope (excluded in 3 of 4 plans on the exchange), Memorial Sloan Kettering (excluded in 7 of 9 plans on the exchange), MD Anderson Cancer Center (excluded in 24 of 42 plans), and Seattle Cancer Care Alliance (excluded in 5 of 8 qualified health plans). Most other centers interviewed had yet to see large effects of narrow networks because enrollment numbers were still low in many states in 2014. Several other cancer centers had trouble even determining their rate of inclusion on exchanges. We also found that 4 of 11 centers did not even have the capabilities to accurately track whether their patients’ health plans were purchased from exchanges. This last observation is particularly interesting as proposed solutions to the issue of narrow networks largely focus on increasing transparency and information available to consumers, who can make educated hospital and physician choices based on outcomes and quality, not just cost. Our findings show that transparency must go both ways, and achieving a high standard requires significant logistical and executive effort. One might question the significance of excluding these stand-alone cancer centers from insurance plans in the setting of increasing national health care costs. The majority of clinical oncology is practiced in the community, and one can argue that stand-alone cancer centers should be reserved for caring for patients with rare malignant neoplasms and clinical trials. In addition, one of the benefits of health exchanges is the tiering of plans, such that patients can choose appropriate plans that fit their financial capabilities. It would thus make sense that not all plans can offer the more expensive specialty care provided by stand-alone cancer centers and academic medical centers. A recent study published in JAMA Oncology showed large and persistent risk-adjusted differences in cancer treatment survival outcomes associated with the type of treating hospital. Importantly, ADCC hospitals had the best overall survival outcomes compared with other National Cancer Institute–designated cancer centers and academic teaching hospitals, and, most notably, a 10% overall survival advantage compared with community centers (28% vs 18% overall survival difference at 1 year).4 While the survival benefit was true for treatment of rare malignant neoplasms such as sarcoma, it was also true for the 4 commonest cancers in the United States, lung, breast, prostate, and colorectal. It is also important for us to realize that the exclusion of these large cancer centers in the form of narrow networks may be trending in the wrong direction. For instance, both Memorial Sloan Kettering Cancer Center and University of Texas MD Anderson Cancer will no longer be covered by a single local area (New York City or Houston, respectively) health insurance plan represented on the federal exchange in 2016.5,6 Particularly in Texas, a state that elected to defer on Medicaid expansion, this diminishes the success of the ACA to improve access for previously uninsured patients to one of the most highly ranked cancer centers in the country. Solutions have already been proposed to address the general problems raised by narrow networks. These include requiring greater transparency and information from insurers to their consumers, an important issue because the aforementioned McKinsey1 study found that more than 40% of previously uninsured patients who signed up for exchange plans in 2014 were unsure of their plan’s network breadth. However, the Centers for Medicare & Medicaid Services has thus far taken a vague approach to network adequacy, using the yet-to-be-defined “reasonable access” standard. This may yet prove to be too meager a solution for the kinds of hospitals we describe herein, as this standard may turn out to be a requirement for insurers to contract with a certain percentage of community oncology facilities or clinics, nothing more. In the setting of improved survival benefits at more specialized centers, patients seeking care through the ACA should have a minimum number of plan options covering the full range of cancer treatment available. The cancer community can help patients make informed choices by developing and implementing better measures of clinical outcomes for public reporting. Cancer centers can also better position themselves with insurers by partnering with them to test innovative value-based payments, such as bundling of services over a predefined period of care to foster innovation that rewards outcomes of care while minimizing unnecessary care. As we move to transform health care in America, we need to be sure that improving access to care for patients ensures freedom of choice for patients to obtain the best possible outcomes for their care. Back to top Article Information Corresponding Author: Stephen M. Schleicher, MD, MBA, Memorial Sloan Kettering Cancer Center, 1275 York Ave, New York, NY 10065 (schleics@mskcc.org). Additional Contributions: Veeral Vipin Mehta, student at Harvard College, contributed to literature review and data interpretation. No compensation was received. Published Online: March 10, 2016. doi:10.1001/jamaoncol.2015.6125. Conflict of Interest Disclosures: None reported. References 1. Bauman N, Bello J, Coe E, Lamb J. Hospital networks: evolution of the configurations on the 2015 exchanges. McKinsey and Co website. April 2015. http://healthcare.mckinsey.com/2015-hospital-networks. Accessed December 8, 2015. 2. Howard DH. Hospital quality and selective contracting—evidence from kidney transplantation. Forum Health Econ Policy. 2008;11(2):2.PubMedGoogle ScholarCrossref 3. Jacobs DB, Sommers BD. Using drugs to discriminate—adverse selection in the insurance marketplace. N Engl J Med. 2015;372(5):399-402.PubMedGoogle ScholarCrossref 4. Pfister DG, Rubin DM, Elkin EB, et al. Risk adjusting survival outcomes in hospitals that treat patients with cancer without information on cancer stage. JAMA Oncol. 2015;1(9):1303-1310.PubMedGoogle ScholarCrossref 5. Campanille C. Obamacare leaves 250 cancer patients in peril. New York Post. November 6, 2015. http://nypost.com/2015/11/06/obamacare-leaves-250-cancer-patients-in-peril. Accessed November 30, 2015. 6. Deam J. Loss of insurance plans could devastate cancer patients. Houston Chronicle. October 31, 2015. http://www.houstonchronicle.com/business/medical/article/Loss-of-insurance-plans-could-devastate-cancer-6603232.php. Accessed December 15, 2015. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png JAMA Oncology American Medical Association

Effects of Narrow Networks on Access to High-Quality Cancer Care

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Publisher
American Medical Association
Copyright
Copyright © 2016 American Medical Association. All Rights Reserved.
ISSN
2374-2437
eISSN
2374-2445
DOI
10.1001/jamaoncol.2015.6125
Publisher site
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Abstract

Now, several years since the implementation of the Affordable Care Act (ACA), many insurance policies purchased over the exchanges are offering limited hospital and physician networks, otherwise known as “narrow networks.” A recent study by McKinsey1 demonstrated that 40% of plans include networks classified as “narrow” or “ultranarrow,” meaning that they have contracts with less than 70% or 30% of hospitals, respectively. This may represent a strategy for insurers to control cost by adversely selecting against patients with expensive chronic conditions in response to other portions of the ACA designed to improve access, such as the inability for insurers to limit access to patients with preexisting illnesses, which results in increased costs for the insurers. Additionally, as the increasing consolidation of hospitals and other health care facilities shifts bargaining power from insurers to health care institutions, insurers resort to solutions such as narrow networks to gain leverage in their negotiations with health care institutions over reimbursement rates. Narrow networks may serve as a way for market forces to penalize high-cost, low-performing hospitals and physicians, while encouraging competition based on the quality of care. Previous research has shown that patients with restricted health plans receive coronary artery bypass grafting and kidney transplantation at hospitals with better outcomes than those used by patients with broader network plans.2 However, we believe that narrow networks instead at least partially represent an alternative mechanism for insurers to manage risk profiles of patients with expensive chronic diseases, similar to their use of adverse tiering formularies (eg, putting all human immunodeficiency virus [HIV] medications in the formulary with the highest cost-sharing requirement for patients) to dissuade patients with high-cost diseases such as HIV and rheumatoid arthritis from enrolling in particular plans.3 Patients with cancer are among the most expensive beneficiaries for insurers because a treatment course can include chemotherapy or targeted biologic therapies, radiation therapy, surgery, regular clinic visits, and frequent hospitalizations. We had concern that insurers are beginning to exclude stand-alone cancer centers in the form of narrow networks as a way to dissuade patients requiring expensive cancer care from choosing a particular health plan. To better understand this issue, we sought quantitative evidence from 11 stand-alone cancer centers (Table) that make up the Alliance of Dedicated Cancer Centers (ADCC). We asked representatives from these centers to offer data for several metrics that demonstrated to what extent they were included on insurance plans found on their state’s exchanges. These measures were based on enrollment in exchange plans as of 2014. Table. The Alliance of Dedicated Cancer Centers View LargeDownload We found evidence of exclusion from more than half of all exchange plans in 4 of 11 of these cancer centers: City of Hope (excluded in 3 of 4 plans on the exchange), Memorial Sloan Kettering (excluded in 7 of 9 plans on the exchange), MD Anderson Cancer Center (excluded in 24 of 42 plans), and Seattle Cancer Care Alliance (excluded in 5 of 8 qualified health plans). Most other centers interviewed had yet to see large effects of narrow networks because enrollment numbers were still low in many states in 2014. Several other cancer centers had trouble even determining their rate of inclusion on exchanges. We also found that 4 of 11 centers did not even have the capabilities to accurately track whether their patients’ health plans were purchased from exchanges. This last observation is particularly interesting as proposed solutions to the issue of narrow networks largely focus on increasing transparency and information available to consumers, who can make educated hospital and physician choices based on outcomes and quality, not just cost. Our findings show that transparency must go both ways, and achieving a high standard requires significant logistical and executive effort. One might question the significance of excluding these stand-alone cancer centers from insurance plans in the setting of increasing national health care costs. The majority of clinical oncology is practiced in the community, and one can argue that stand-alone cancer centers should be reserved for caring for patients with rare malignant neoplasms and clinical trials. In addition, one of the benefits of health exchanges is the tiering of plans, such that patients can choose appropriate plans that fit their financial capabilities. It would thus make sense that not all plans can offer the more expensive specialty care provided by stand-alone cancer centers and academic medical centers. A recent study published in JAMA Oncology showed large and persistent risk-adjusted differences in cancer treatment survival outcomes associated with the type of treating hospital. Importantly, ADCC hospitals had the best overall survival outcomes compared with other National Cancer Institute–designated cancer centers and academic teaching hospitals, and, most notably, a 10% overall survival advantage compared with community centers (28% vs 18% overall survival difference at 1 year).4 While the survival benefit was true for treatment of rare malignant neoplasms such as sarcoma, it was also true for the 4 commonest cancers in the United States, lung, breast, prostate, and colorectal. It is also important for us to realize that the exclusion of these large cancer centers in the form of narrow networks may be trending in the wrong direction. For instance, both Memorial Sloan Kettering Cancer Center and University of Texas MD Anderson Cancer will no longer be covered by a single local area (New York City or Houston, respectively) health insurance plan represented on the federal exchange in 2016.5,6 Particularly in Texas, a state that elected to defer on Medicaid expansion, this diminishes the success of the ACA to improve access for previously uninsured patients to one of the most highly ranked cancer centers in the country. Solutions have already been proposed to address the general problems raised by narrow networks. These include requiring greater transparency and information from insurers to their consumers, an important issue because the aforementioned McKinsey1 study found that more than 40% of previously uninsured patients who signed up for exchange plans in 2014 were unsure of their plan’s network breadth. However, the Centers for Medicare & Medicaid Services has thus far taken a vague approach to network adequacy, using the yet-to-be-defined “reasonable access” standard. This may yet prove to be too meager a solution for the kinds of hospitals we describe herein, as this standard may turn out to be a requirement for insurers to contract with a certain percentage of community oncology facilities or clinics, nothing more. In the setting of improved survival benefits at more specialized centers, patients seeking care through the ACA should have a minimum number of plan options covering the full range of cancer treatment available. The cancer community can help patients make informed choices by developing and implementing better measures of clinical outcomes for public reporting. Cancer centers can also better position themselves with insurers by partnering with them to test innovative value-based payments, such as bundling of services over a predefined period of care to foster innovation that rewards outcomes of care while minimizing unnecessary care. As we move to transform health care in America, we need to be sure that improving access to care for patients ensures freedom of choice for patients to obtain the best possible outcomes for their care. Back to top Article Information Corresponding Author: Stephen M. Schleicher, MD, MBA, Memorial Sloan Kettering Cancer Center, 1275 York Ave, New York, NY 10065 (schleics@mskcc.org). Additional Contributions: Veeral Vipin Mehta, student at Harvard College, contributed to literature review and data interpretation. No compensation was received. Published Online: March 10, 2016. doi:10.1001/jamaoncol.2015.6125. Conflict of Interest Disclosures: None reported. References 1. Bauman N, Bello J, Coe E, Lamb J. Hospital networks: evolution of the configurations on the 2015 exchanges. McKinsey and Co website. April 2015. http://healthcare.mckinsey.com/2015-hospital-networks. Accessed December 8, 2015. 2. Howard DH. Hospital quality and selective contracting—evidence from kidney transplantation. Forum Health Econ Policy. 2008;11(2):2.PubMedGoogle ScholarCrossref 3. Jacobs DB, Sommers BD. Using drugs to discriminate—adverse selection in the insurance marketplace. N Engl J Med. 2015;372(5):399-402.PubMedGoogle ScholarCrossref 4. Pfister DG, Rubin DM, Elkin EB, et al. Risk adjusting survival outcomes in hospitals that treat patients with cancer without information on cancer stage. JAMA Oncol. 2015;1(9):1303-1310.PubMedGoogle ScholarCrossref 5. Campanille C. Obamacare leaves 250 cancer patients in peril. New York Post. November 6, 2015. http://nypost.com/2015/11/06/obamacare-leaves-250-cancer-patients-in-peril. Accessed November 30, 2015. 6. Deam J. Loss of insurance plans could devastate cancer patients. Houston Chronicle. October 31, 2015. http://www.houstonchronicle.com/business/medical/article/Loss-of-insurance-plans-could-devastate-cancer-6603232.php. Accessed December 15, 2015.

Journal

JAMA OncologyAmerican Medical Association

Published: Apr 1, 2016

Keywords: health services accessibility,hospital costs,special hospitals,cancer therapy,hospital payment,medical insurance coverage,quality of care,cancer,cancer care facilities

References