How do preferred provider network plans discourage the use of non-network providers?

Preferred provider network plans discourage the use of non-network providers primarily by requiring greater cost sharing for those services. When individuals seek care from providers outside the established network, they typically face higher out-of-pocket expenses such as higher deductibles, copayments, or coinsurance. This financial incentive encourages individuals to utilize the network of preferred providers who have agreed to lower fees and greater coverage terms with the insurer, thus driving more patients toward in-network services.

The structure of these plans is designed to keep healthcare costs manageable for both the insurer and the insured. By making it more affordable to seek care within the network, these plans effectively steer members toward using in-network providers, ultimately fostering relationships between the insurers and those providers while promoting more coordinated and cost-effective care.

In contrast, other options do not effectively achieve the same incentive. While restricting the range of covered services could limit choices, it does not directly address financial considerations. Applying a relative value scale to benefits is more about standardizing evaluations of services than about influencing provider choice. Prohibiting referrals to non-network doctors would create a rigid system, possibly leading to dissatisfaction among members who value choice and flexibility in their healthcare options.