The narrowing of networks hits home

During the 2014 California Health Journalism Fellowship in February 2014, two speakers told the gathered journalists that one of the big health reform stories of the coming year would be the narrowing of provider networks as insurers look for ways to cut costs and increase profits.

Dr. Robert Ross, president of The California Endowment, and Gerald Kominski, director of UCLA’s Center for Health Policy Research, predicted that patients’ choices of physicians and hospitals would become ever narrower. Yet, Dr. Ross noted, “I don’t think there’s been a single newspaper story about narrow networks in the private sector.” 

The concept of narrow networks became personal to me this week when my insurer, Blue Shield, informed me that it would no longer consider my health care provider, the Palo Alto Medical Foundation, a preferred provider after June 30, which meant that if I wished to continue to see my doctors there, I would have to pay about 50 percent of the billed costs, compared with the 20 percent I now pay under my gold-level individual policy, purchased through Covered California at a cost of $1,065 a month.

Similar letters went out to hundreds of thousands of other northern and central Californians who use healthcare providers affiliated with Sutter Health Care, as PAMF is -- 140,573 HMO members and 139,338 PPO members. Both individual and group policyholders are affected.

In the letters, Blue Shield provided no explanation for its failure to reach agreement with Sutter Health, though in subsequent press accounts it has argued that Sutter’s charges are much higher than other Northern California providers. Sutter has publicly accused Blue Shield of trying to lower its costs. "This is really about a very large and powerful health-insurance company trying to cut back on the money it spends on actual patient care," Bill Gleeson, a spokesman for Sutter Health, told the Palo Alto Weekly. On its website, PAMF wrote, “We would very much like to be part of the Blue Shield provider network, and we made the insurance company an extremely fair and reasonable offer.”

I don't know who to be mad at, Blue Shield or Sutter/PAMF. (Both, incidentally, are incorporated as not-for-profits.) I am disappointed at the situation, because I thought that enactment of the Affordable Care Act meant my worries over health insurance were behind me.

For decades, I received my health insurance through an employer-provided group policy, and later, through COBRA. When my right to buy through COBRA ended in 2009, I had to turn to the individual market, where I was denied coverage, largely because of minor age-related conditions. I felt fortunate to find coverage because of a little known state mandate to insurers to offer at least two policy choices to people who were no longer eligible for COBRA. But my choices were very expensive and very limited, and provided much less comprehensive coverage than I’d had through COBRA or my group policy before that. I swallowed hard and paid the bills, because going without coverage wasn't an option.

The Affordable Care Act was a godsend for people like me, because it barred insurers from denying coverage because of pre-existing conditions. When Covered California unveiled its offerings late in 2013, I had several dozen policies from which to choose, including four that considered my PAMF doctors in-network (unfortunately, all four were offered by Blue Shield, indicating that the state’s other big insurers had already narrowed their networks to exclude Sutter-affiliated doctors).

The current impasse between Blue Shield and Sutter means that there is no insurance option available now through Covered California, the state’s health insurance exchange, for people like me who want to continue to see their Sutter-affiliated doctors. In order to continue to see the doctors with whom I’ve had a relationship for 18 years, I have to purchase insurance outside the Covered California exchange. Staying in my medical home and keeping my doctors are more important priorities for me than staying with Blue Shield or buying through Covered California just to show support. 

Because of the Affordable Care Act, I can no longer be denied coverage. But when Covered California loses full-pay customers like me, it undermines the long-term viability of the exchange as a marketplace where everyone can find a policy that suits him or her.

The irony for Blue Shield is that I was a profit center. I paid Blue Shield $11,728.68 in premiums last year, and Blue Shield paid out $7,045.56 for my health care.

I fear that from now on, every open enrollment period will trigger a new search for an insurer who will allow us to keep seeing doctors who know our histories intimately. Although I have resolved my own situation, I worry about the impression that the Blue Shield/Sutter impasse leaves with the larger community and the damage it will do to the perception of Obamacare.