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April 2016

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

Author Affiliations
  • 1Memorial Sloan Kettering Cancer Center, New York, New York
  • 2University of Michigan Health System, Ann Arbor
  • 3University of Texas MD Anderson Cancer Center, Houston
  • 4Institute for Strategy and Competitiveness, Harvard Business School, Boston, Massachusetts
JAMA Oncol. 2016;2(4):427-428. doi:10.1001/jamaoncol.2015.6125

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.

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