Health network instability, contract disputes on upswing

The Center for Studying Health System Change found network disruptions occurring in more than half of the markets it studied.

By Julie A. Jacob, AMNews staff. July 30, 2001.

Health plan networks are becoming less stable, while contract disputes between health plans and physicians and hospitals are becoming increasingly common, according to the Center for Studying Health System Change.

The nonpartisan research organization in Washington, D.C., has been tracking changes and trends in health care in 12 communities across the country for five years.

"These contract showdowns were really not on the radar screen when we last visited those 12 communities in 1998-99, but it is very much an issue now in more than half of the markets we studied," said Ann Greiner, the center's vice president of public affairs.

Network upheavals and contract disputes have been detected in Boston, Phoenix, Seattle, Miami, northern New Jersey, Orange County, Calif., and Greenville, S.C.

Several factors have contributed to a rise in network instability and contract showdowns, Greiner said. One is that consolidation among hospital and physician groups, combined with patient demand for broad networks, has given physicians and hospitals more clout in negotiating contracts.

Hospitals and physician groups also have become more savvy about the types of contracts they are willing to accept, Greiner said.

"Physicians have gained experience with managed care contracting and have become smarter about the kinds of contracts they want to enter into," Greiner said.

Bill Mahon, CEO of the South Carolina Medical Assn., said he had noticed that physician groups in the state were being more choosy in signing contracts with health plans. [...]