Insight, analysis & opinion from Joe Paduda

< Back to Home


Limited provider networks…that’s the point, folks!

There’s a good bit of hand-wringing and wailing by physicians and their support groups over healthplans limiting their networks to relatively small subsets of the entire provider community.

As if this was somehow a bad thing.

Health plans are contracting with smaller groups of providers to

  • a) drive more patient volume to those providers in return for
  • b) better financial terms and
  • c) tighter integration between the healthplan and the selected providers.

I find it darkly funny that the AMA and other groups are moaning about the potential impact on patient access to health care of these smaller networks; one of the primary reasons many don’t have health care is because physician services COST SO MUCH.

Instead of whining about the injustice of it all, the AMA – and the provider groups who aren’t part of the smaller networks – could decide to, oh, I dunno, maybe reduce their fees, agree to strict evidence-based medical guidelines, implement system-wide electronic health records and EDI for billing and encounter data…

After all, I’m quite sure the health plans with small network options would love to have bigger networks – but only if the cost of care makes the health plans’ product offerings cost-competitive.

It would be easy to miss the real significance of this tempest-in-a-teapot, and that would be this – By leveling the playing field, ACA and the Exchanges enable consumers to quickly and efficiently compare health plan offerings.

THE key decision criterion is price.

These health plans understand it, have gotten some providers to agree to help them reduce their “cost of goods sold”, and therefore are going to win more business.

Big networks work when HR people are the buyers; they don’t want to hear from employees and spouses complaining that their pediatrician or ob/gyn or cardiologist is not in-network.  When consumers and small business people are doing the buying, they are much less likely to be concerned about every Dr Tom, Dr Dick, and Dr Mary being in-network; they are choosing between a plan they can afford and one they can’t.

What does this mean for you?

You can have a huge network or a reasonably priced health plan, but you can’t have both.

3 thoughts on “Limited provider networks…that’s the point, folks!”

  1. Joe, another great post! Physicians could indeed try doing something- like lowering fees- than just making a lot of hullabaloo over this. Whatever happened to caring about the patients?

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.