California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Many Calif. Employers Opting for HMOs With Slim Provider Networks

Thousands of employers in California and across the U.S. are eliminating costly physicians and hospitals from their health care provider networks in an effort to reduce health care costs, the Los Angeles Times reports.

About 'Narrow Network' HMOs

Since the recession started in 2008, more than 10,000 California employers and public agencies have opted for so-called "narrow network" HMOs.

Such health plans offer fewer choices in health care providers but can reduce an employer's spending on insurance premiums by nearly 25% in some cases.

Insurers and employers say the narrow networks are growing fastest among small businesses. However, some larger entities -- such as CalPERS and the University of California -- also are offering narrow network plans from Blue Shield of California and Health Net.

Health Advocates Weigh In

Consumer advocates and health care experts warn that cutting physicians and hospitals from health plan networks might harm patients, particularly those who depend on specific health care providers for the treatment of life-threatening or chronic conditions.

They added that HMO enrollees seeking care from out-of-network health care providers typically are responsible for the entire cost of their treatment.

Insurers' Stance

Health insurers contend that they take health care quality into account when designing the smaller provider networks.

They also argue that narrow network HMOs do not dramatically reduce enrollees' choices, noting that the networks often include many of the same health care providers listed in the broader HMO networks (Helfand, Los Angeles Times, 4/3).

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