A U.S. News analysis of health plans currently available on California's new insurance exchange found little correlation between the monthly price a consumer pays for a plan and the number of hospitals in the plan’s network. The findings indicate that, with careful selection, it’s possible for most Californians to buy an Obamacare plan that offers some freedom in choosing a hospital without paying top dollar in monthly premiums.

U.S. News examined so-called qualified health plans in the silver tier of the CoveredCalifornia exchange, using network data that was previously available on the exchange website. (It has since been removed.) The goal was to determine whether consumers who purchase a lower-priced plan tend to be restricted to a narrower hospital network. U.S. News compared each plan to others offered in the same rating area; California's regulators have divided the state into 19 rating areas that in many cases include several adjacent counties.

In almost every California rating area, the analysis revealed, at least one mid-priced health plan rivals or equals the most expensive plan in terms of network breadth. In Contra Costa county, for example, the networks of three different plans – Blue Shield’s PPO, Contra Costa Health Plan’s HMO and Health Net’s PPO – include five of the nine hospitals in the rating area. In each case, four of those hospitals, including the two that perform best on the quality measures U.S. News uses to evaluate hospitals, are in all three networks. But the plans charge very different rates. A 21-year-old nonsmoker who doesn't qualify for a federal subsidy and who opts for the most expensive plan, Health Net’s PPO, will pay $434 more per year in premiums than an identical individual who purchases the Contra Costa HMO, and $658 more per year than an identical Blue Shield PPO customer.

"Sometimes," says Gerald Kominski, director of the UCLA Center for Health Policy Research, "you just pay more" – without necessarily getting access to more providers. Kominski reviewed the U.S. News results.

Differences in monthly premiums may in part reflect the rates negotiated between different insurers and their respective providers, such as hospitals and doctors. “Certain plans are focused more on hospitals and other plans are focused on physicians,” says Jeff Rideout, a senior medical advisor to CoveredCalifornia. U.S. News was unable to obtain reliable data on doctor networks.

Provider networks may be a more important source of plan-to-plan differences in California than elsewhere, because California regulators don't allow for significant variation in cost-sharing structure amongst plans of the same metal tier. But insurers, which often maintain online provider directories, rarely make network information public in ways that facilitate comparisons among different insurers' plans. That means the tedious task of comparing networks falls squarely on consumers. 

The challenge of this task was recently addressed in a letter by the Centers for Medicare and Medicaid Services, which proposes that for 2015, insurers submit a list of "hospital systems" and other providers to CMS so the agency can determine whether each network provides "reasonable access" to providers. The letter also says that CMS is looking into how to create  "a search engine function for consumers to search for providers." 

The current lack of transparency makes the task of identifying which doctors and hospitals are in a plan’s network time-consuming and challenging – even in California, where at one point, the exchange made plan provider listings public. CoveredCalifornia recently took down the files after finding errors in the doctors lists. UCLA’s Kominski says consumers must be able to compare provider networks if they’re going to make an informed choice when they’re picking a health plan. “How can you expect people to shop between five and fifteen different bronze plans unless you know which doctors and hospitals are in the networks?” he asks.

“We don’t know if a narrow network is a good or bad [network],” Kominski says. ”What really matters is: ‘Is my doctor or hospital in my network?’” Making an informed choice, experts say, is especially difficult for exchange customers who are first-time buyers. In a recent Kaiser Foundation poll, a little over half of those likely to purchase an Obamacare plan would choose a plan with a narrower network over one with a higher monthly premium. But when respondents were asked whether they'd still prefer a cheaper, narrower network if it excluded providers "they normally use," approximately a third changed their minds.

Network size arguably matters less than the quality of the hospitals and doctors in it. In a follow-up analysis, U.S. News found that broader hospital networks are more likely to include hospitals that excel on the kind of quality measures, such as patient safety scores, that underpin the U.S. News hospital rankings. But there are exceptions, so narrowness cannot be equated with poor quality. While the U.S. News methodology focuses on high-acuity patients rather than average health care consumers, it offers a basis for objectively comparing hospitals on different networks.

Consumers, says Stanford University economist Alain Enthoven, shouldn't let themselves be fooled by a high sticker price. “I do think the average consumer thinks higher price is somehow better.” Down the road, he says, the goal is “to make it so easy [for consumers] to make a choice that people don’t worry about the fine print.”

TAGS: health insurance hospitals insurance Affordable Care Act health care reform California.

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