Article 1 of 4: Narrow Networks
Self-funding is rapidly moving into schools, cities and counties of all sizes as a major cost-control strategy. And why not? Governmental organizations that self-insure can design their own plans and tailor them to meet their employee’s needs, all while eliminating those features with little utilization. All signs indicate that self-funding your plan can yield significant savings for stable groups from 30 employees and up.
As adoption grows, cost-reduction strategies in self-funded environments are evolving as well. In this article series, Jason Rushton will share four top ways that your organization can take advantage of the trend.
Narrow networks — also called tailored networks, high performance networks, skinny networks, exclusive networks, focused networks and restricted networks – is not really a new idea. The HMOs and PPOs of the 90s were narrow networks selected primarily because they offer the insurance carrier discounts in exchange for directing patients toward their services. However, the narrow networks of the 90s also attempted to manage costs by trying to control the medical necessity of care. They utilized methods such as pre-authorizations, restricted hospital stays, second opinions, etc. There was considerable pushback to these methods.
Today’s narrow networks are different and are growing in popularity. Along with more sophisticated data and analytics, networks can now be based on quality of care as well as cost. For schools, cities and counties who often cannot change co-payment structures or deductibles, sometimes the only way to keep costs down is to keep the networks as affordable as possible.
Communicating a change to a narrow network can be tricky. However, it is manageable when you share information on how the providers have been chosen based on quality of care. More and more employees are considering cost as a major factor in their health care spending and most are willing to exchange a narrow network for keeping their share of premiums lower.