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The big squeeze


Limited provider networks are cutting more than costs; these narrow networks are cutting dermatologists. One expert shares insight on what derms need to know.

Dr. ElstonDermatologists might not become familiar with limited provider networks until they’ve been dropped from one of these narrow networks, according to dermatologist Dirk M. Elston, M.D., chairman of dermatology at Medical University of South Carolina, Charleston, and former American Academy of Dermatology (AAD) president.

“[That’s when dermatologists] find they can no longer see a percentage of their patients,” says Dr. Elston, who presented, “Narrow Networks and Changing Payment Methods” during the March 2017 AAD annual meeting in Orlando, Fla.

Limited provider networks are a cost-control measure for payers. Employer purchasers are also turning to the networks, which limit patients’ options for providers and hospitals.

“Employers find that healthcare for their employees is now the single biggest line item on their budgets. They’d rather find a less expensive way to purchase those services than deny the services to their employees. One of the ways to do that is to negotiate limited or exclusive contracts that provide healthcare services to the employees at a discounted rate,” Dr. Elston says.

One example of how that works is large corporate employer will approach a health system, like Mayo Clinic, and propose the corporation’s employees will go to that health system for healthcare, in exchange for a discounted rate. The narrow network makes sense from the employers’ and employees’ points of views if large, reputable organizations are providing the healthcare.

“But if you are a doctor in private practice, and you end up outside one of those agreements, it can be a problem for your practice,” Dr. Elston says.

Sometimes, these agreements take quality into account; sometimes, they focus mainly on cost containment, according to Dr. Elston.

The cost-containment measures can result in hardships for not only physicians but also patients. Access issues include not having a specialist, such as a dermatologist, nearby. In some cases, dermatologic care isn’t provided by a dermatologist.

“… Team-based care can be good, but there should be transparency. Patients should know what they’re getting,” Dr. Elston says.

In an optimal system, purchasers make the decisions based on a transparent system. Available information should include provider training, he says.

“If the provider is not a board certified dermatologist, then what is the provider’s training and background? And who is supervising them?” Dr. Elston says.

In some states-Florida, for example-a specialty physician assistant had to be supervised by a physician ratio of one physician to two physician assistants practicing in a specialty area. But there was no requirement that the supervising physician be board certified in that specialty, according to Dr. Elston.

Today, information about providers, their levels of training and who is actually providing care isn’t clear.

“The people listed in network might not all be board certified dermatologists. They might not all be taking patients. In some cases, the physicians [listed] were dead,” he says. “So, it’s important to clean up the provider roles, so that it’s readily apparent to patients what access is available and who is available to see them.”

Dermatologists, stand ready

There’s no question that payment models are going to change, Dr. Elston says.

“There will be more of a focus on quality and outcomes. There will be tiered payments. Not everyone will be paid the same, based on service. Some of the tiered payments will be related to what organization you’re a part of-how big it is, how effectively it can bargain for competitive rates. And some of it will be related to quality. What are the quality and outcomes of the organization?” Dr. Elston says.

Interestingly, narrow networks and other healthcare changes are often associated with Obamacare; however, they’ll remain, whether the ACA stands, is changed or overturned, according to Dr. Elston.

“The fundamentals of many of these changes are not driven by Washington. They are driven by corporate purchasers who have found the cost of providing healthcare for their employees just goes up and up and up. Limited provider networks and tiered payment models are often solutions for getting more value for their dollars,” Dr. Elston says.

Dermatologists should be aware of the changes that are happening. AAD.org offers members information on how to navigate changes in our healthcare system. [see sidebar]

To build a stronger foundation to weather the changes, dermatologists also should become active members in their state societies, Dr. Elston says.

“The AAD has a very effective state liaison office and works with the state societies,” he says.

Narrow networks, for example, can greatly affect patient access and quality of care. That’s a safety issue, which might impact a state but often is not restricted to one state. In those cases, state societies can collaborate with AAD to be in more powerful positions to address access and safety issues, while making change, according to Dr. Elston.

For help on the topic, AAD members can access this link for AAD’s advocacy web page on network adequacy: https://www.aad.org/advocacy/network-adequacy.

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