Narrow Networks Top Payor Product Innovations List for 2014

Tuesday, June 17th, 2014
This post was written by Patricia Donovan

If recent market data is any indication, employers are gravitating toward narrow networks in greater numbers. For instance, a March 2014 Wells Fargo Insurance survey of more than 70 insurance companies placed narrow networks among the top three employer product innovations in 2014, along with are accountable care organizations (ACOs) and increased wellness programs.

In just one example, Harvard Pilgrim HealthCare this week introduced ElevateHealth℠, a partnership with Dartmouth-Hitchcock and Elliot Health System that is a non-profit, high-performance, defined-network product offering access to premier hospitals and providers in New Hampshire.

With its emphasis on care coordination within the network, ElevateHealth insurance premiums on average offer 10 percent savings compared with Harvard Pilgrim’s similar full-network plans, the insurer said.

And last month, UnitedHealthcare announced it would cut 2 to 4 percent of the physicians in its Medicare Advantage network in some Virginia service areas.

In theory, narrow networks—and their close cousins, tiered, tailored and high performance networks—sound like a good thing: health insurance products that group providers into tiers based on their cost or efficiency of care, then steer patients to choose these providers through lower premiums or cost sharing.

In practice, however, some consumers served by narrow networks are balking at the difficulty of obtaining appointments with network providers. Earlier this month, the Wall Street Journal reported that insurers in several states are expanding hospital and physician networks for plans sold through the Affordable Care Act’s health insurance exchanges amid gripes from patients and state officials about limited provider choices.

Anthem Blue Cross, Blue Shield of California, Health Net and WellPoint are among insurers that have substantially expanded provider networks in its exchanges, the article stated. And more providers are slated to join Harvard Pilgrim HealthCare’s ElevateHealth’s network beginning in July.

Earlier this year, industry thought leaders analyzed what the proliferation of narrow networks means for healthcare. Steven Valentine, president of The Camden Group, talked about the impact on both providers and consumers.

“First of all, we anticipate an increase in the number of covered lives,” Valentine said during HIN’s annual healthcare trends forecast. “Providers are going to see an increase in patient volumes, especially primary care providers. And especially providers in states that have opted to stay in Medicaid.”

However,” he continued, “Many of the qualified health plans have narrow networks, so patients are probably going to be confused about which doctors are in their networks and probably will shift around until they can find the right place for them.”

Providers in networks with bronze plans will probably have much higher increases in patient volumes, he predicted. “And other providers will probably see some shifting until patients can figure out where they need to go.”

Regardless of the confusion, Valentine expects the trend of narrow networks to continue. “We clearly see narrow networks operating in conjunction with tiered benefit plans; that is, a lower premium, a more narrow network. We’ve clearly seen that in some of the exchanges as we look at the various medal options that are available. Narrow networks are here to stay; they are not going to go away.”

Catherine Sreckovich, managing director in the healthcare practice at Navigant, concurs. “I agree 100 percent. We’re going to see [narrow networks] more and more. And to the extent there continues to be competition in the exchanges and more health plans trying to get involved, this trend will continue.”

Excerpted from: Healthcare Trends & Forecasts in 2014: Performance Expectations for the Healthcare Industry

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