Reining in rankings for tiered and narrow networks

Organized medicine has joined lawsuits to nip bad performance measurement programs in the bud. And in New York, the state attorney general has warned several insurers about their programs.

Editorial. Sept. 17, 2007.

Just as the 1980s' Transformers and Teenage Mutant Ninja Turtles have made a comeback this summer, so has another fanciful corporate brainchild from that time: the tiered physician network.

But while the first two are harmless, the networks -- programs in which health plans give their members incentives to use physicians in "cost efficient" tiers and to avoid physicians identified as "cost inefficient" -- raise issues concerning disruption of care.

A big red flag has to do with the role of cost, which has been there since the beginning. In the '80s, PacifiCare Health Systems implemented a two-tiered hospital network that factored in hospital charges. In 2002, the insurer replaced it with a "narrow network" -- a program offering members care from only a select group of doctors and hospitals -- and added a quality component.

The idea took off from there. Now, Aetna, Cigna, and UnitedHealthcare are among the insurers exploring tiered network systems.

The cost-cutting appeal to health plans is obvious, and the networks may also be an easy sell to unsuspecting patients looking for a price break. But a June report from the American Medical Association outlined the problems that can arise from the tiered or narrow-network model: Patients lose access to physicians not in the network, causing irrevocable damage to physician-patient relationships. Primary care physicians have a hard time referring patients to specialists they trust because those physicians may not be in the network.