In the previous three posts of this series, I looked at what provider networks are, and I discussed both positives and negatives. That leads to a very natural next question: what’s next?
My crystal ball is no clearer than anyone else’s, but there are some issues worth watching.
Governments are taking aim at provider networks.
The No Surprises Act, which took effect in 2022, is beginning to show results. Most notably, balance billing has, as intended, become less common. That said, the law has also produced some unintended effects. One of the most significant is that far more disputes than expected are being sent to arbitration — about 14 times the projected volume (PDF Link). At the same time, and to the surprise of many observers, providers are prevailing in most of those disputes. These outcomes suggest that the underlying problem the law was meant to address — inappropriate network designations — may not have been as widespread as originally believed.
Beyond surprise billing, policymakers are increasingly focused on whether provider networks actually give people meaningful access to care. As a result, recent legislation has placed greater emphasis on the transparency and accuracy of provider directories. Concerns about so-called “ghost networks” (listings that include providers who are unavailable or no longer participating) are widespread, particularly in behavioral health. In at least one case, a carrier has begun using data generated through the No Surprises Act to impose contractual consequences when in-network hospitals rely on out-of-network providers, prompting the predictable outcry from affected stakeholders.
States have also taken action. Across the country, state legislatures and regulators are tightening standards for network adequacy, improving rules around directory accuracy, and adding clearer requirements related to travel distance and appointment wait times. Several states have also strengthened consumer protections, requiring carriers to treat care as in-network when members make good-faith efforts to stay within a network but lack reliable or accurate information.
Market pressures are increasing.
Health care costs continue to rise, and pressure on both providers and insurance carriers remains intense. Those pressures are showing up more clearly in provider networks, helping explain why network contract negotiations are happening more often — and why they are becoming more contentious.
One major factor is consolidation. Both carriers and providers have been merging or aligning into larger organizations, which has shifted negotiating power. According to the American Medical Association’s most recent study of health insurance markets, 97 percent of U.S. metropolitan commercial markets were classified as “highly concentrated” in 2024. In practical terms, that means a small number of insurers dominate many local markets. Providers are consolidating as well. The U.S. Government Accountability Office estimates that at least 47 percent of physicians are now part of hospital systems, up from less than 30 percent in 2012. Hospital systems themselves continue to merge, further strengthening their negotiating position.
Workforce shortages add another layer of strain. Simply put, there are fewer clinicians available to care for a growing and aging population. The Association of American Medical Colleges estimates that the United States could face a shortage of tens of thousands of physicians (PDF Link) by the mid-2030s, with primary care facing especially large gaps. Similar shortages affect nurses and other frontline clinicians. As a result, access is limited not only by how networks are designed, but also by how many providers are actually available to participate in them.
Carriers are experimenting.
“Skinny” (narrow) networks aren’t new. They have been part of the individual and small-group markets since the ACA took effect, and in many cases were a key reason premiums stayed lower. What has changed is how these networks work. Carriers are now experimenting with network design, using new models and tools alongside more traditional approaches to building networks.
For example, tiered networks guide members toward a smaller group of preferred providers, which concentrates patient volume in certain specialties or service lines. Carriers have also created centers-of-excellence programs for expensive procedures, limiting which providers can deliver that care. Even simple plan design changes, like encouraging people to use urgent care instead of the emergency room, can change how networks function, especially when urgent care centers are tied to specific hospital systems.
More recently, carriers have been focusing on what is often called “value-based care.” In these models, provider payments are tied not just to how much care is delivered, but also to outcomes, total cost, or the health of a patient population. This shifts decision-making earlier in the process, influencing care before services are provided rather than relying mostly on rules applied afterward. In that sense, value-based care builds on earlier “consumer-driven” approaches from the 2000s, which aimed to influence choices earlier in the care process by changing financial incentives.
The Most Likely Near-Term Outcomes
Overall, current trends point toward gradual changes rather than dramatic overhauls of the provider network model. Continued growth in value-based care arrangements is likely, especially in markets where carriers and providers already have the size and systems needed to support them. These models fit naturally with tighter networks and more targeted contracting, giving carriers another way to manage costs and utilization.
Networks themselves are also likely to become more segmented. Instead of a single, uniform network, carriers may increasingly “slice” networks by service type, condition, or setting of care. This is already visible in the way most carriers use separate behavioral health networks. For members, this may feel less like having one network and more like navigating several different ones, depending on the type and complexity of care they need.
There may also be an increase in the number of provider networks available. Many carriers today offer only two or three network options. Over time, this could expand to a wider range of networks, each with different tradeoffs between cost, access, and choice. It would not be surprising to see the return of “gatekeeper” plans or similar designs. While more options can be helpful, they also place a greater burden on consumers, who may need additional support to understand how these networks differ in practice.
The Final Word
Nothing in the current landscape suggests that provider networks are failing, or that they are about to be replaced. In fact, recent trends suggest that the use of provider networks has not proven to be the stumbling block many initially expected. Instead, the changes now underway reflect the same pressures affecting the rest of the health care system: rising costs, workforce constraints, increased regulatory scrutiny, and shifting expectations. The bottom line is that provider networks aren’t the problem. They’re simply a place where larger, systemic problems become more visible.
For consumers, the key takeaway is that provider networks will continue to evolve and change, becoming more complex rather than less. Greater transparency, expanded options, and new payment models may offer real benefits, but they also make health care harder to understand. Going forward, the challenge will be less about deciding whether provider networks should exist, and more about helping consumers learn how to navigate them effectively.