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Covered California’s Narrow Networks Offer Similar Access and Quality

BY ARMINÉ PAPOUCHIAN – A recent study from Health Affairs called into question the conventional wisdom that smaller hospital networks are inherently inferior to larger ones.

While the networks available to individuals and families purchasing plans through Covered California are smaller relative to those available for employer-based plans, the vast majority of physicians and hospitals are available to everyone – at least that’s true in Blue Shield of California’s case. (Health Affairs found that, on average, Covered California networks included 71 percent of hospitals.)

The state’s focus on provider costs yielded early success as proven by California’s record enrollment, and that rate increases in 2015 were contained. Many of these successes were the result of the state getting an early start to setting up its exchange, contracting with health plans and educating residents about eligibility. While other states debated how and whether to implement the Affordable Care Act, California took action as early as 2010.

As Health Affairs points out, provider networks in California have several layers of accountability, including federal law, Department of Managed Healthcare review and oversight from Covered California itself.

This accountability is reflected in California’s ability to maintain access-to-care on the ground. Health Affairs found that, on average, 92 percent of residents lived within at least one hospital area in Covered California plans, compared to 93 percent for commercial plans. They also concluded that areas of lower geographic access for Covered California corresponded with restricted access for those in commercial plans.

To assess network quality, Health Affairs created an index of six indicators generally used to evaluate the level of care provided. Some pertain to particular health outcomes, while others focus more generally on patient experience. Most indicators showed no difference in quality between exchange and commercial network, but some indicators actually showed somewhat higher quality for exchange plans.

They conclude: “These results suggest that narrower Marketplace networks do not necessarily restrict geographic access and, more importantly, do not reduce access to high-quality care compared to the networks of standard commercial plans.”

Health Affairs notes that the debate over narrow networks is reminiscent of the criticism of managed care in the 1990s, and encourages continued evolution and fine-tuning in access-to-care, and balancing cost.

Blue Shield built a high-value network for individuals and families purchasing coverage on Covered California and we’re proud that 89 percent of hospitals from our standard PPO are included.

Arminé Papouchian is vice president of provider network management at Blue Shield of California.