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Marketplace Trends: Narrowing Networks, Declining Participation from Urban Hospitals

Jessica Men
An analysis of hospital participation in plans on the Affordable Care Act exchanges found that despite increasingly narrow networks, almost all highly ranked hospitals can be found in at least 1 plan.
Marketplace Trends: Narrowing Networks, Declining Participation from Urban Hospitals

A recent analysis by the Robert Wood Johnson Foundation investigated trends in network participation among hospitals, in order to assess how networks are changing on the Affordable Care Act (ACA) exchanges.

Several important changes that were noted between 2015 and 2016 include: a decreasing trend in networks that include a regionally ranked hospital, a greater decline in network participation from urban and metropolitan hospitals than rural hospitals, and an overall trend of narrowing marketplace networks and movement away from broader network plans.

Study researchers selected their sample of “highly rated” hospitals from the U.S. News and World Report’s 2015 list of Best Regional Hospitals, choosing the 2 most highly ranked regional hospitals in each area, for a total of 156. They identified hospital network affiliations using a centralized database of healthcare providers and the health insurance plans in which the hospitals participate.

The trend of increasingly narrow marketplace plans may be due to adjustments that health plans have to make to respond to the decrease of broad preferred provider organization (PPO) plans on the ACA exchanges, according to lead researcher Kathy Hempstead. FierceHealthPayer reported that two-thirds of insurers that offered PPO plans last year have either reduced or stopped offering them in 2016.

The new plans also provide less comprehensive coverage for enrollees than they did in previous years. Many consumers returning to the marketplace in 2016 may find that their choices have changed in ways that limit their access to certain providers.

But while hospital network participation as a whole decreased significantly, it still remains the case that almost all highly ranked hospitals were found to be in at least 1 ACA marketplace plan in 2015 and 2016. So despite overall narrowing choices and more expensive plans, customers can most likely still easily find a marketplace plan that includes a highly ranked hospital.

"I think it shows there's a lot of choice still in terms of hospitals that people would want to go to," Kathy Hempstead said. "It shows that there's still pretty broad-based access to these high-quality hospitals in most markets.”

Of course, it may be too soon to tell whether these trends will continue in the same direction.

"In some ways that will depend on what the experience is this year [for insurers]," Hempstead said. “Consumers have repeatedly indicated that they are willing to trade access to providers in exchange for lower health insurance prices. It remains to be seen to what extent they are willing to accept the products currently being offered, which are in many ways quite different from those of the previous year.”

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