Paul Levy Says about the Networks You May Not Like

This has been my week to discuss networks (Internet and electricity), but I would be remiss if I didn’t spend a few moments on the networks that are most likely to rob us of personal choice and increase costs: Health care networks.

Wait, didn’t President Obama promise us that the new health care law would preserve choice for us? Didn’t he promise us lower costs?  Well, in spite of much good that the law accomplished in terms of providing access to health insurance, these are two areas that have gone awry. For a variety of reasons–most of which have little to do with providing you with better care–the hospital world has grown more centralized. It’s done so to reduce competition and get better rates from insurance companies. It’s done so to create larger risk pools of patients under the “rate reform” that incorporates more bundled and capitated payments. It’s done so to keep you as a captive customer for your health care needs. It’s been aided and abetted by electronic health record companies that find a mutual advantage with their hospital colleagues in minimizing the ability of your EHR to be easily transferable to other health systems. As I’ve noted, we truly have created “business cost structures in search of revenue streams,” rather than a vibrantly competitive system focused on increasing quality and satisfaction and lowering costs.


Many people don’t even know they are part of a health care network until they discover its limitations. It might be that the insurance product they bought has different rates for in-network doctors and facilities from out-of-network doctors and facilities. It might be that their primary care physician subtly or not so subtly directs them to specialists in his or her network because they share in the financial reward of eliminating “leakage” to other systems. It might be that they discover that an MRI or other image taken in one health system cannot be transferred electronically to another, perhaps necessitating a second image and its accompanying cost.

From the patient’s point of view, the strongest argument for an effective health care network is that your care might be carefully managed throughout your diagnosis and treatment and recovery journey.  But that result is observed in the breach more than found to be true. Indeed, there often seems to be little in the care pathway within a network that is indicative of good communication or a breakdown of silos across the various specialists and facilities in the network.

The country could have gone another way.  When we funded the current expansion of EHRs, we could have made it a requirement that they easily talk with one another.  When we encouraged clinical integration, we could have made it clear that combined corporate ownership across the spectrum of care would be severely limited, allowing for many “Switzerlands”–community practices and community hospitals that could have served multiple systems in a nondiscriminatory manner. Instead, the US government and many state governments have actively encouraged just the opposite.

I’m sorry to say that this horse has left the barn, and it’s probably too late to close the door in most parts of the country. Instead of enjoying the positive externalities of a truly interdependent system of health care facilities and doctors, the US has dramatically foreclosed the potential for such societal gains. This is a mistake for which we will all pay for a very long time.

Paul Levy is the former CEO of BIDMC and blogs at Not Running a Hospital, where an earlier version of this post appeared.