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Center Sees Health Plans Having Trouble Keeping Providers

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NU Online News Service, June 28, 2:15 p.m. – The Center for Studying Health System Change, Washington, a nonprofit health care think tank, says health plans are having serious trouble with maintaining provider network stability in at least seven of the 12 health care markets its researchers have visited in recent months.

The researchers found a reasonable degree of network stability in Cleveland; Indianapolis; Lansing, Mich.; Little Rock, Ark.; and Syracuse, N.Y. They found noticeable instability in Boston; Greenville, S.C.; Miami; Northern New Jersey; Orange County, Calif.; Phoenix; and Seattle.

In Seattle, for example, a six-month protest by 150 specialists that started in January 2000 forced the local Blue Shield carrier to change its payment system, center researchers report.

In Orange County, California, a large hospital threatened to exclude plan patients unless plans agreed to payment increases. All but one large carrier agreed to payment increases, the researchers report.

The researchers attribute the recent network instability to financial problems at some medical practice companies; consumer groups’ complaints about managed care companies’ cost management practices; rising medical costs; provider consolidation; and shrinkage in the number of inpatient hospital beds.

Employers once sided with health plans against the providers in an effort to cut costs, but now employers in some communities are siding with the providers, center researchers report.

The center has published two new papers describing its findings on provider network stability, Provider Network Instability: Implications for Choice, Costs and Continuity of Care and Health Plan-Provider Showdowns on the Rise, on the Web, at


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