Health Insurance Managed Care

Who uses out-of-network providers?

According to a recent paper by Kyanko, Curry and Busch (2003), 8 percent of insured individuals used an out-of-network physician.

Why are people using out-of-network services? The authors give the following breakdown.

Approximately 40 percent of individuals using out-of-network physicians experienced involuntary out-of-network care. Whereas fifteen percent of outpatient out-of-network contacts were involuntary, almost 60 percent of inpatient out-of-network contacts were involuntary.

Another problem with using out-of-network providers is that patients were not sure what cost they would incur. The authors write:

We also found a lack of cost transparency for out-of-network services. For over half of inpatient contacts and approximately 40 percent of outpatient contacts, the patient did not know how much they would have to pay before receiving care. One third of individuals using out-of-network services reported not having enough information about the costs of using an out-of-network physician…Our results suggest that involuntary care and lack of cost transparency in out-of-network physician services are attributable to encounter characteristics and system-level failures rather than individual patient health literacy. Lower educational attainment was not associated with increased involuntary out-of-network use or lack of cost transparency.


1 Comment

  1. The pie chart reproduced above suggests that the top three reasons account for 65% of all out-of-network use: desire for continuity; following recommendation of others; seeking particular physician skill. Each of these reasons implies a deliberate choice – none seems especially “involuntary.”

    Additionally, the “involuntary” use of out-of-network inpatient facilities is substantially larger than “involuntary” use of out-of-network physicians. That seems at odds with the top 3 reasons reported for “involuntary” use overall. That is, if 65% of the usage stems from deliberate intent rather than anything inadvertent or “involuntary” how does the percentage for inpatient care rise to 60%?

    Maybe it’s because of admissions ordered by the 15% of physicians who were used “involuntarily”? Or maybe – as we learned to look for in 4th grade – there’s a common denominator problem?

    Anyway, the overall reported proportion of out-of-network use is 8%. So the 40% incidence of “involuntary” usage within that 8% translates into about 3% overall. Recall that the administration tried to argue that 5% of the population is a number small enough to disregard when considering the number of people who are forced to give up the insurance they like. Based on that argument (with which I disagree btw) 3% of the population would also be small enough to disregard.

    I disagree with the administration’s argument because the forced narrowing of patient choice for millions of people is clearly disruptive despite low-sounding percentages. That is true whether it’s an insurance company or the government that is doing the forcing.

    Besides, such forced narrowing is counter to what the administration promised the public (yet, while outside public view, it nevertheless planned, designed, and built the mechanisms that we now experience as forced narrowing of choice.)

    So it seems to me the findings of this study are not nearly so problematic as the unkept, slippery, and ultimately false government promises about keeping what we like. Nor are this study’s findings so problematic as private insurance companies narrowing their networks e.g., United dropping physicians from its Medicare Advantage plans.

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