A health plan's ability to establish an effective provider network depends on the characteristics of the proposed service area and the needs of proposed plan members. It is generally correct to say that

Question

Quizplus · Accepted Answer

Urban areas typically have a higher density of healthcare providers, giving health plans more options and flexibility when establishing a provider network. In contrast, rural areas often have fewer providers, making it more challenging for health plans to create an effective network. Therefore, statement B is correct.

Statement A is incorrect, as having providers affiliated with single entities can limit a health plan's contracting options and may result in higher costs.

Statement C is incorrect, as consumers and purchasers in markets with little health plan activity may not have much experience with any type of managed care plan and may not have a preference for HMOs or PPOs.

Statement D is incorrect, as large employers typically have more resources and are better equipped to adopt health plans than small companies.

A Health Plan's Ability to Establish an Effective Provider Network