Some Doctors Cost More. Why?

Today’s topic, how do physician networks work? The simple answer is it’s about relationships.

If you have health insurance, you have access to what’s called a network. A network is a group of hospitals, doctors, labs and other medical professionals who have entered into an agreement with a health coverage provider to deliver quality service at reduced rates in network patients in exchange for more business. The doctor ends up getting less per patient but more patients come to the door. Meanwhile, patients pay less for the services they received.

It’s a lot like shopping at a local mom and pop grocery store as supposed to a huge grocery chain. You can go to whichever store you choose but you’ll pay less at the larger store because they do so much more business.

The network system also bring within a certain level of quality. Because in order for a doctor to become part of the network, he or she must be properly credentialed and researched by the state in which they practice. Then, in order to stay in the network, he or she must be recertified every one to three years.

Just because a doctor is out of network doesn’t mean you can’t use him or her. It just means you pay more, because that doctor hasn’t negotiated the same rates as a network doctor. If there were no network system in place, doctors could set their own prices on a per procedure basis. So, everyone’s costs would go up.

So to sum it up, networks mean greater volume for doctors while patients get greater peace of mind and reduce rates. Now you know. Until next time, stay smart and stay healthy.

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