Narrow Networks: A New-Old Healthcare Business Model

"Narrow networks,” similar to the HMOs of the 1990s, are becoming the structure of choice in the health plans now being offered on state insurance exchanges created under the Affordable Care Act. Smaller networks that exclude some large hospitals and doctors’ groups are the only way to control costs and manage care, say health insurers. Health insurance companies also say that consumer resistance to HMOs’ similar narrowing of provider choice is being avoided today because they are now working more closely with providers, and because potential clients are more focused on cost. As always, the ability to deliver coordinated, quality care at reduced cost will be the issue. If these new networks can deliver better care at a lower price, the bottom line for both the U.S. healthcare industry and its customers will profit.

John Howell, Editorial Director