MVP Health Care CEO Dave Oliker shares his thoughts on a wide range of topics related to health care and health reform in his blog. Dave’s posts reflect his unique perspective based on his more than 30 years of experience in the health care industry.

His latest post:

Why Provider Networks Work—And What Happens When They Don’t

June 1, 2012 by Dave Oliker

Out-of-network charges have been in the news lately: stories about patients socked with outrageous bills from doctors who weren’t in their insurer’s network.

I’ll get to those charges in a minute, but first I want to say something about health care provider networks. Generally, the existence of networks benefits providers, consumers, and businesses that provide health coverage for their workers. It holds costs down, facilitates quality care, and reduces administrative burdens. If consumers choose an out-of-network doctor or hospital, it’s true that they have to pay a greater percentage of the bill (or even, depending on the plan, all of it). But a careful consumer can simply choose in-network care and not have to worry about all that. Right?

Most of the time. It’s pretty hard to be a savvy consumer in emergency situations or in hospitals, though, where whole teams of people can be involved in your care. In fact one hospital in New York actually put up a sign reminding patients to ask the doctor treating them if he or she accepts their insurance. You do have the right to ask for another doctor. Of course, you can only ask if you’re conscious. And even if you are, chances are good that your anesthesiologist or radiologist doesn’t belong to any network. What are you going to do? Politely decline to be put under for your operation?

Compounding this problem is the fact that some providers don’t clearly communicate their fees. Some bill the insurance company for the agreed-upon out-of-network rate, and then bill the patient even more if that rate doesn’t suffice. One large national insurance company has even filed lawsuits against certain doctors it feels are misleading patients and scheming to charge exorbitant amounts.

If you can’t always choose your provider, and you can’t tell what a provider is going to charge, you as a consumer are at risk of getting one of those crazy-high bills someday—even if you dutifully pay your health insurance premiums and carefully choose doctors in your insurer’s network.

So what’s the solution? I believe in appropriately-regulated markets and I don’t usually recommend legislative remedies for health care issues. But, in this case, the only solution I see is a ceiling on how much a provider can charge out-of-network patients—a ceiling that’s fair to both providers and patients, and one that gives everyone some peace of mind.