What is the purpose of a provider network?

The primary purpose of a provider network is to designate healthcare providers that work with an insurance plan. This means that insurance companies create agreements with a specific group of healthcare providers, which can include hospitals, doctors, specialists, and other medical facilities. When policyholders choose healthcare services from this network, they typically benefit from lower out-of-pocket costs due to the negotiated rates between the insurance company and the providers.

Having a defined provider network helps streamline the process for insured individuals to find healthcare services while ensuring that the care they receive meets certain standards established by the insurance company. It can facilitate easier access to services, improve patient outcomes through managed care approaches, and support the sustainability of healthcare financing by controlling costs through the use of a select group of providers.