Unlocking Healthcare Potential: A Call for Administrative Reform

The Entrenched Challenges in Primary Care Development

For an extended period, mounting insurance costs and public concern over medical expenses have been frequently linked by economists to a lack of competition in the healthcare sector. The prevailing discussions largely concentrate on the exit of current market players through mergers and acquisitions, overlooking the difficulties faced by emerging providers and innovative service models trying to penetrate the market.

Navigating the Complex Landscape of Healthcare Expansion

Establishing new primary care practices involves a labyrinthine process. Before services can commence, providers must secure network contracts, then undergo a rigorous credentialing process for each individual clinician (physicians, nurse practitioners, physician assistants), and finally ensure their accurate listing in online directories. Any misstep in this sequence can lead to patients' care not being covered. This process must be repeated with every insurer, and sometimes multiple times with the same insurer due to organizational segmentation.

Geographic Disparities and Systemic Roadblocks

These administrative challenges contribute significantly to why many Americans struggle to secure primary care, why costs remain stubbornly high, and why the healthcare industry often appears antiquated. In specific local markets, dominant provider organizations wield control over much of this process, utilizing administrative barriers to impede the entry of new competitors and innovative care models.

Case Studies: Illustrating the Pervasive Obstacles

In regions such as the Inland Empire, a densely populated area east of Los Angeles with limited primary care access, new entrants face substantial resistance. For instance, despite Medicare requirements for comprehensive coverage, a leading managed care organization, Heritage, declined to contract with a new primary care group offering in-home or virtual services for seniors. Similarly, Optum, a UnitedHealth Group subsidiary, has prolonged the credentialing process for extended periods, preventing new providers from treating patients, even when these providers are already credentialed with other UHG entities.

Competitive Suppression and Innovation Stifling

The issues extend beyond specific regions or initial processes. In Northern California, a prominent provider network, Hill Physicians, has openly rejected new doctors, citing concerns about competition with existing providers. This stance exemplifies how established entities can leverage administrative power to suppress innovation and block alternative care delivery methods. UnitedHealth Group's practice in Las Vegas, requiring multiple, duplicative contracting processes for a single PCP, further highlights this systemic inefficiency rooted in historical acquisitions.

Insurers as Gatekeepers: More Than Just Bureaucracy

Beyond the primary contracting and credentialing phases, other insurers also present significant hurdles. Elevance Health (Anthem), for example, mandated new and inexplicable legal entities for primary care groups wanting to offer behavioral health services, despite their contracts potentially allowing for integrated care. This creates unnecessary administrative burdens for smaller practices and obstructs the delivery of crucial new services.

Directory Inaccuracies and Patient Access

Even after clinicians are contracted and credentialed, issues persist. SCAN Health Plan has reportedly taken up to two years to correctly list PCPs in its network directories, directly preventing patients from accessing care and delaying service initiation. Similarly, Elevance has shown multi-month delays in updating its directories, disregarding Medicare's 30-day update standard and California's two-week regulation. These delays directly impede patient access to entitled services under their Medicare Advantage plans.

Beyond Insurers: State-Level Administrative Inertia

It's not solely private entities that contribute to this gridlock. State Medicaid agencies often operate with outdated systems, creating significant administrative burdens. Nevada's Medicaid agency, for instance, still demands wet ink signatures for enrollment paperwork despite existing state laws recognizing electronic signatures. California's Medicaid agency also exhibits lengthy delays in admitting new PCPs, even though their procedures offer no discernible improvement in quality control over Medicare's more efficient process. These state-level hurdles add further layers of complexity, requiring providers to navigate multiple, often redundant, contracting processes.

The Call for a Healthcare 'YIMBY' Movement

Whether these barriers are overtly anti-competitive or simply a reflection of inefficient bureaucracies, they create healthcare markets that are resistant to change. Patients and clinicians desire a more dynamic healthcare system, but this rigid and outdated bureaucracy suppresses innovation and limits access. The healthcare sector requires a paradigm shift akin to the 'YIMBY' (Yes In My Backyard) movement in housing policy, which advocates for policy changes to remove barriers to construction. This means federal and state authorities must actively challenge incumbents who erect barriers to new services, impose fines for non-compliance with regulatory standards, and mandate automatic acceptance of Medicare-enrolled clinicians without redundant paperwork. Ultimately, health plan executives must acknowledge that a stagnant, uncompetitive provider landscape inflates costs and frustrates patients, and take proactive steps to eliminate the organizational deadwood that stifles progres