The public thinks that we should have limited networks? Let’s get real!

Reforming Medicare: What does the public think?

AEI and the Brookings Institution, September 19, 2014

Panelists: Joseph Antos (AEI), Marge Ginsburg (CHCD), Robert Moffit (Heritage), Kavita Patel (Brookings) and John Rother (NCHC)

On Friday at AEI, Marge Ginsburg of the Center for Healthcare Decisions (CHCD) opened a discussion on redesigning Medicare by presenting new findings from the CHCD’s MedCHAT study, which engaged diverse participant groups in reviewing current Medicare benefits and addressing the potential for budget reallocation.


How To Fix Medicare? Ask The Public

By Mary Agnes Carey
Kaiser Health News, September 23, 2014

While participants did not eliminate benefits, they accepted stricter criteria or new limitations on current coverage. For example, 82 percent supported the use of defined networks of providers, but allowed the use of a provider outside the set network if approved by a primary care provider.


OK to Limit Medicare Provider Choices, but Don't Cut Benefits

American Academy of Family Physicians (AAFP), September 26, 2014

Overall, participants did not choose to cut benefits but opted instead for increased restrictions regarding how and when those benefits would be provided, said Ginsburg. Of those who participated, 82 percent said they would require Medicare enrollees to choose a provider network rather than continue the current carte blanche approach to seeing health care professionals. Most stipulated that referrals outside the network should be covered with consent from a patient's primary care physician.


Re-Designing Medicare

Findings from the California Medicare CHAT Collaborative
Center for Healthcare Decisions, September 2014

The Center for Healthcare Decisions (CHCD) in partnership with LeadingAge California developed the California Medicare CHAT Collaborative (“MedCHAT”) to encourage public input on Medicare.

MedCHAT is an interactive, computer-based simulation, in which participants create a benefits package when potential coverage options exceed current Medicare funding.

82% of participants accepted a network model when it was presented as a trade-off for new Medicare benefits.

Participants were presented with several categories where coverage could be improved or new benefits added to Original Medicare. The majority of participants opted to include all of them. (Long term care; dental, vision and hearing; mental health; transportation)

Of the 82% of participants that agreed to the network model, most included the flexibility of allowing the primary care provider to authorize out-of-network use. The remaining 17% chose to retain Medicare’s current provider model.

Participants’ views were also captured via the pre/post survey questions regarding the actions they could support to reduce the impact of Medicare on the federal budget. Before the MedCHAT discussion, “requiring Medicare users to choose a specific provider network” was an option supported by 23% of participants. After MedCHAT, 34% supported this requirement. However, 82% of participants accepted a network model when it was presented as a trade-off for new Medicare benefits. Thus it appears that requiring use of provider networks was not as acceptable when the purpose was to reduce the federal cost burden.

(As a way of reducing the federal budget, lowering the amount Medicare pays doctors was supported by 14%, the lowest of any recommendation.)



By Don McCanne, MD

Citing this study from the Center for Healthcare Decisions, it is being widely reported that 82 percent of the public would be willing to accept provider networks for Medicare. Conservatives particularly are touting the fact that the public is no longer demanding unlimited choice of physicians and hospitals under Medicare. Is this what the study really showed?

A few specifics:

  • In the study, 82 percent accepted a network model when it was presented as a trade-off for a significant level of new Medicare benefits: long term care, dental, vision, hearing, mental health, and transportation.
  • Most approved a network model if their primary care provider were to have the freedom to authorize out-of-network care. This basically defeats the control imposed by the closed network since it allows the primary care gatekeeper to open the gate at any time.
  • 86 percent did not approve of reducing Medicare payments to physicians. The purpose of limited networks is to extract provider agreements to accept lower payments. If there is no reduction in payment rates, then in-network providers would still receive the same established Medicare rates as the out-of-network providers, defeating the primary purpose of networks.

So the public can accept provider networks in exchange for more generous benefits as long as the networks do not limit provider choice and do not fulfill their function of reducing payments to physicians.

This study will be used to claim that Medicare beneficiaries prefer limited provider networks. They do not. The majority of seniors are still enrolled in the traditional Medicare program. Those who select the private Medicare Advantage plans (MA) do not do so in order to decrease their choices in health care providers. They do so because they pay less for premiums and cost sharing while receiving additional benefits such as the Part D drug benefits - benefits made possible by federal legislation authorizing overpayments to the MA plans, much of which is retained by the insurers.

The claim that patients do not mind losing their choice of physicians and hospitals as long as the insurance product is a better deal has almost become a meme. But patients supporting networks did not intend that that limitation be applied to their own doctors and hospitals. As that reality is now hitting home, we’re beginning to hear the rumblings.