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Limited choice of physicians may help keep costs down
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The use of "narrow networks," which limit to a handful the number of health care providers covered in-network by a health plan as a way to keep costs in check, has not been embraced by most employment-based group health plans—at least not yet.
Despite employers' slow adoption of narrow networks, more are considering limiting their plans' in-network health providers and selecting those that make the cut based on whether they offer pricing discounts for their services, according to a new analysis published by the nonprofit Employee Benefit Research Institute (EBRI) in Washington, D.C. So-called high-performance networks limit providers to those that have high-quality ratings for their services, although the two approaches to selecting covered providers—price and quality—are not mutually exclusive.
Narrow Provider Networks for Employer Plans, was published in the Dec. 14, 2016,
EBRI Issue Brief.
Employers Interested but Cautious
The prominence of narrow networks in plans that are available on the Affordable Care Act's (ACA's) health exchanges "so far has not translated strongly to private-sector employers. But there are signs that employers' interest in narrow networks may grow in the near future," said Paul Fronstin, director of EBRI's health research and education program and co-author of the report.
To measure what's happening with narrow networks in employer health plans, the researchers used various methods to collect and analyze plan data, including interviewing HR directors at 11 large, unnamed U.S. employers. Among their findings:
Responding to employer interest, several of the major national carriers—including UnitedHealthcare, Aetna and Cigna—are offering employers narrow or other alternative networks covering at least several dozen metropolitan areas, as are many state-based Blue Cross and Blue Shield plans, the report states.
[SHRM members-only toolkit:
Managing Health Care Costs]
"Where narrow networks are offered, their adoption could be increased by giving workers stronger financial incentives to consider them," Fronstin said. For instance:
Currently, however, neither defined contributions nor private exchanges are widely used by employers, Fronstin pointed out.
SHRM Online Article:
Health Plans Shift Toward Paying Doctors for Value Provided, SHRM Online Benefits, January 2017
High Performance Networks Entice Health Plan Sponsors,
SHRM Online Benefits, August 2014
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