The importance of provider network quality

Imagine you have two employees scheduled for a knee replacement. They’re on the same health plan, but they are having surgery at two different in-network hospitals. Technically, your plan treats them the same—at least in terms of coverage and cost. In reality, their outcomes could differ drastically.

Oftentimes, a provider network is primarily a list of who employees can see. It doesn’t address something equally important: how well any one surgeon or facility on that list performs.

Let’s take a closer look at why “good insurance” and “good care” aren’t always the same, along with what employers can do to make sure their plan accounts for both.

Traditional factors considered when evaluating plan options

Selecting a health plan can be a daunting choice, and employers typically try to make the process a little more straightforward by weighing the following factors:

• Cost: Health benefits are one of the biggest line items on an employer’s budget, and costs just keep climbing. In a recent survey, employers projected a median cost trend increase of 9.2% for 2027. In 2025, the increase was 8.8%, and the cost trend is expected to hit 8.5% for 2026.
• Network breadth: Employers want enough doctors in network that people can get an appointment when they need one—and this carries a lot of weight with employees, too. In a recent Employee Benefit Research Institute (EBRI) survey, 80% of traditional plan enrollees said a “good network of physicians and hospitals” was very important. In fact, provider network was the top factor in choosing a plan, even ahead of premiums.
• Big-name hospitals: Health systems with strong familiarity or name recognition go far with employees and, as a result, employers who are choosing their plans. In a recent survey of patients navigating a new-to-them health condition, 53% said they choose a hospital first (before they pick a specific doctor), or they pick a hospital and a doctor at the same time, vs. choosing the doctor then choosing the hospital. One in five said they would switch providers to get care at their preferred hospital.
• Minimal disruption: Employees want to keep seeing the providers they already know and trust, so many employers keep this in mind when making plan or network changes to minimize pushback.

On the surface, these factors make sense. They’re easy to compare across carriers, and employees typically notice them first. But this list often lacks any measure of how well a specific facility or provider performs—even though that ultimately shapes an employee’s outcome, and can even have an impact on the total cost of care.

Why a large provider network doesn’t guarantee the best care

An expansive provider network gives employees options for where they can go for care (if they don’t want to pay for it all on their own), but it doesn’t tell them much about what happens after they get there. Here’s why a provider’s inclusion in the network says little about their results.

In-network status is built around access and price

Employees tend to think that in-network providers have some sort of endorsement or stamp of approval, but it’s mostly a contractual arrangement built to give members access at negotiated rates.

HealthCare.gov defines a network as “the facilities, providers, and suppliers a health plan has contracted with” to provide care. So, an in-network provider is simply one who has agreed to the plan’s terms and rates. That agreement is designed to deliver access and affordability, not necessarily to measure results.

Credentialing confirms qualifications, not outcomes

Providers do need to meet a baseline to get into a network. Most plans follow NCQA credentialing standards, which assess a provider’s background and legitimacy to provide care (like checking their license to practice, education, and board certification).

These checks are an important safeguard, but they’re designed to confirm a provider is qualified to practice, not to compare how patients do after receiving care.

High ratings are just an average

Big names and high ratings hold a lot of appeal in plan design, but they don’t mean as much as people like to think. For example, Medicare gives hospitals an overall score of one to five stars by averaging their performance across dozens of quality measures. But one study found those scores didn’t reliably predict how well a hospital handled specific conditions or procedures. It’s just an average.

Even top-rated hospitals had weak spots. On any given quality measure, about one in six five-star hospitals ranked in the bottom 25% on average. A JAMA Surgery analysis of nearly 1.9 million Medicare surgical patients at more than 3,200 hospitals points the same way. Higher-rated hospitals did better on average, with 30-day mortality of 4.9% at five-star hospitals versus 6.8% at one-star hospitals. But results varied widely within every rating tier. Among five-star hospitals alone, mortality ranged from 2.4% to 9.1%. Put simply, top ratings don’t guarantee top results.

Cost often gets more attention than quality

With healthcare costs steadily climbing, it’s understandable that employers tend to put cost front and center. One study found that employers and their benefits consultants focus more on financial than nonfinancial performance when making decisions about health plans.

This means they can end up with a provider network that’s broad, recognizable, and affordable, but still leaves the most important question unanswered: Which provider or facility will actually deliver the best outcome?

How much do outcomes vary based on provider or facility?

Quality differences show up across all kinds of care—but they’re typically easier to see in planned surgery, where you can track complications, readmissions, and revisions.

Research shows an employee’s surgical outcome can shift based on a few different factors:

• The facility: CMS data on hip and knee replacements at more than 3,400 U.S. hospitals found complication rates ranged from 1.2% to 5.6%, even after accounting for differences in patients’ health. That’s almost a fivefold difference.
• The hospital network: A JAMA Surgery study found that outcomes varied widely across hospitals tied to U.S. News & World Report’s “Honor Roll” (its annual list of top-ranked hospitals), with complication rates differing by as much as 4.3 times across networks.
• The surgeon: In another study in robotic surgery, where surgeons use the robot as a tool (not a human replacement), patients treated by very high-volume surgeons had lower odds of complications and readmissions than those treated by low-volume surgeons.

You won’t find any of these differences in a provider directory. Two in-network hospitals can look identical to an employee who’s browsing their options—and, without better information, they’re left to choose based on convenience, reputation, or referral.

How employers can pair network access with quality

A broad provider network still matters. Nobody wants a plan that makes it hard to find a doctor. But your plan should pair that access with an easy way to understand quality. Here are a few ways to do that:

• Ask for quality data alongside cost data: When you evaluate a carrier or vendor, ask for procedure-specific outcomes rather than just discounts or premiums. You could ask:
  • What are complication and readmission rates for common surgeries?
  • Can you share results at the surgeon level (not just the hospital level)?
  • How often do patients need a follow-up or revision procedure?
• Add a Centers of Excellence benefit for surgical and specialty care: These programs connect employees with providers vetted for their results in specific conditions and procedures.
• Make the high-quality option the easiest option: Lower or waive cost-sharing for higher-performing providers, and highlight those options during open enrollment so employees know they exist before they need care.

Many carriers and other benefits partners are building tools to help with each of these, so start by asking what yours already offers.

When you build these changes into your plan design, it’s way more likely to deliver on both fronts: access to care and confidence in its quality.

A large provider network helps get your employees to the doctor. What happens after that depends on the provider and facility they actually choose.

As an employer, you can’t always make that decision for them, but you can design a plan that makes the best choice the obvious one. Carrum Health can help. Carrum’s Centers of Excellence network vets providers based on outcomes and whether care is truly needed, so employees get matched with high-quality specialty care, often at no cost to them.

Your employees deserve good coverage and good care. The strongest benefits strategies pair a solid provider network with a clear commitment to measuring quality and sharing it openly.