Dr Paul B. Ginsburg Advocates for Narrow or Tiered Networks

Despite increasing mergers, hospitals can stay competitive in consolidated markets by utilizing tiered or narrow networks, said Paul B. Ginsburg, PhD, the Leonard D. Schaeffer Chair in Health Policy Studies at the Brookings Institution and a professor of health policy at the University of Southern California.

Transcript (slightly modified)

What tools can payers and others use in consolidated markets to make those markets more competitive despite mergers?

Probably the most powerful tool is narrow networks. Narrow networks have been very popular on the marketplace exchanges, and for good reason, because the premiums they offer are substantially lower than plans with broad networks. So in a sense, insurers have found that that’s a way they can get better prices from providers in a consolidated market, or in an unconsolidated market as well.

There’s something else that’s very much in the news now, is that tiered networks also have a lot of potential to foster competition in consolidated markets. They’ve often been blocked by anti-steering provisions that dominant hospitals have required in their contracts with insurers. Massachusetts had dealt with this by outlawing those provisions. But last week, we learned that the Department of Justice is suing a large system in Charlotte, North Carolina, as … its contracts violate the anti-trust laws. So I’m going to be very excited to watch how that develops.