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MCIC Press Release

For more info, contact MCIC:
Phone: (732) 292-1100
Fax: (732) 292-1111
Email: info@themcic.com

Hot Off The Press

MCOs Beef-Up Contracting To Meet Demand for More Comprehensive Networks

Manasquan, N.J. -- Managed care plans have been increasing the number of physicians and hospitals in their provider networks to offer more value to enrollees and strengthen their competitive edge, according to an exclusive industry study by The Managed Care Information Center (MCIC) for its publication, The National Directory of Managed Care Organizations.

Overall, the average provider networks grew 18.6 percent over one year. The largest increase was in the area of primary care physician (PCP) contracts, MCIC found. The average number of PCPs in a provider network increased 31.2 percent from 1997 to 1998, according to MCIC. In comparison, the average number of specialists rose 18.3 percent and the average number of hospitals increased 7.4 percent during that time.

Specifically, a national analysis found that in 1997 the average provider network consisted of 1,911 PCPs, 3,036 specialists and 68 hospitals. In comparison, in 1998, the average provider network, on a national level, was 2,283 PCPs, 3,591 specialists and 72 hospitals.

"All regions, on average, saw growth in the comprehensiveness of provider networks between 1997 and 1998," said Gwen Lareau, MCIC’s director of research.

On a regional level, MCIC analysts found, on average, several regions had more comprehensive provider networks than the national average, while other regions’ provider network averages fell below the national average for 1998.

The New England and East Central regions were the only regions that fell below the national figures on the average network size for all three provider groups analyzed by MCIC. They also were among the bottom in terms of network growth during the one-year period analyzed. The New England region saw its physician network grow less than 4 percent during that time — the smallest increase of any region — while physician networks in the East North Central region grew approximately 13 percent.

The New England, East North Central, East South Central, West North Central and Mountain regions fell below the national average for the number of PCPs in a provider network. However, the Mountain region saw incredible growth in its physician network as a whole, increasing more than 46 percent from 1997 to1998, MCIC found. As could be expected from the previous PCP stat, the bulk of that growth in provider networks was in the area of specialists — PCPs comprised only 29 percent of the average provider network in the Mountain region, according to the MCIC analysis.

Regions falling below the national average for the number of specialists in provider networks were New England, South Atlantic, East North Central, West North Central and Pacific. The New England, South Atlantic and East North Central regions also fell below the national average for the number of hospitals contracted, as did the Middle Atlantic region. However, the Middle Atlantic region was the only region in the country to have experienced a double-digit percentage increase in the average number of hospitals in the networks.

Avg. Primary Phys.

Avg. Specialists

Avg. Hospitals

Region

1997

1998

1997

1998

1997

1998

New England

1,723

1,786

2,882

3,010

53

53

Middle Atlantic

2,297

2,644

4,568

5,441

50

55

South Atlantic

2,700

2,879

2,932

3,267

58

62

East North Central

1,268

1,482

1,719

1,961

41

44

East South Central

1,584

1,822

3,540

3.988

76

80

West North Central

1,240

1,417

2,587

2,931

70

75

West South Central

2,381

2,965

3,450

4,412

109

116

Mountain

1,386

1,834

2,949

4,509

96

101

Pacific

2,210

3,035

3,310

3,458

80

84

Source: The Managed Care Information Center, 2001.

An analysis of the growth of physicians (primary and specialists) by region, on average, found that the Mountain region had the highest percentage of growth (46.3 percent) between 1997 and 1998 in the number of physicians in its provider networks. New England had the least amount of growth (3.96 percent) in the number of physicians added to its provider networks.

Managed care networks operated by for-profit companies tended to have physician networks that were almost three times as large as those operated by nonprofit organizations, MCIC found. The average for-profit network has 3,007 PCPs and 4,921 specialists. The average nonprofit network consists of 1,151 primary physicians and 1,746 specialists.

"On average, both PPOs and POSs tend to have more primary care physicians and specialists in their networks than HMOs," Lareau said.

POS plans have an average of 2,688 PCPs and 5,050 specialists. PPOs have an average of 3,587 PCPs and 5,668 specialists. HMOs, on the other hand, have, on average, 1,514 PCPs and 3,123 specialists.

The size of managed care networks also varied by model type. Network- and mixed-model plans tended to have larger networks than group-, staff- and IPA- model plans.

For instance, network-model plans have an average of 2,283 PCPs and 3,831 specialists in their networks. Mixed-model plans have, on average, 1,711 PCPs and 3,393 specialists in their networks.

Group-model plans have an average of 592 PCPs and 1,137 specialists, while IPA-model plans have 1,251 PCPs and 2,191 specialists. Staff-model plans tend have the least comprehensive provider networks, averaging 378 PCPs and 427 specialists.

PCP/Specialist Ratio Explored

While MCOs have discussed boosting the percentage of PCPs that comprise their networks, the average ratio of PCPs to specialists is fairly similar across MCO type, ranging from 32.7 percent of PCPs for HMOs to 38.8 percent of PCPs in PPOs. The difference between for-profit and nonprofit plans also is fairly negligible: 37.9 percent of for-profit plans’ networks consist of PCPs, compared with 39.7 percent for nonprofit plans.

Regionally, networks with the largest percentages of PCPs were most likely to be found in the South Atlantic (46.8 percent), Pacific (46.7 percent) and East North Central (43 percent) states. Address: The Managed Care Information Center, P.O. Box 456, Allenwood, NJ 08720; (732) 292-1100, e-mail glareau@themcic.com, fax (732) 292-1111, www.themcic.com.


For more information contact The Managed Care Information Center, 1913 Atlantic Avenue, Suite F4, Manasquan, NJ, 08736, toll-free telephone 1-888-THE-MCIC (1-888-843-6242), fax 1-888-FAX-MCIC (1-888-329-6242), e-mail info@themcic.com or online at http://www.themcic.com.

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