Don’t be Narrow-Minded About Narrow Networks

In late 2013, I predicted the future. Sadly for me, it did not include any lottery tickets or fantasy football excellence. Instead, I chose to use my clairvoyant powers to share what was coming to employer health plans and consumers: Narrow network solutions.

We can all agree on one thing: Health Care Reform has caused disruption. While this has led to some confusion (and comical skits on SNL), it has also created innovation and new developments in the market.

What is a narrow network?

One key development is the emergence of so-called narrow network solutions. With narrow networks, the name pretty much says it all. Plans drive members to utilize a smaller band of hospitals, facilities, physicians, and specialists as their in-network providers. In return, the providers agree to more aggressive discounts based on the expected increase in consumers.

These solutions are seen primarily on The Insurance Marketplace—or the Public Exchanges—and can be found at Healthcare.gov. More recently, IU Health Plans, an arm of IU Health, implemented an employer product aimed at employers who welcome the narrow network concept in exchange for deeper discounts and quality care. Recently we have heard from other TPAs and insurers that they are ready to provided tiered network (driven by benefit design and richness) and/or narrow network approaches.

Feel like you’re back to the HMOs of the 90s? While there are some similarities, narrow networks still have people participating in a PPO with the ability to self-refer (without the restrictions of a gatekeeper doctor required by a HMO). So it’s like the PPO you’ve grown to love with just a narrower in-network provider list.

Some say this is bad. Some say this is good. I say it is no doubt different. My only concern is a lack of transparency tools that allow members to quickly review cost and quality measures. Think Angie’s List. This consumer-empowering innovation is on its way in the health care arena with tools like Castlight and HealthPro becoming more accessible.

What does all of this mean?

Now that UnitedHealthcare is pulling out of almost all the public exchanges, what’s left for consumers at Healthcare.gov is almost always ONLY a narrow network solution. It was a game changer when UHC entered The Insurance Marketplace in 2015 with their broad network solution, and you better believe it is a game changer as they exit in 2017.

As narrow networks become more commonplace, I expect employers and plans outside of The Insurance Marketplace to establish these types of solutions. Members will be more accepting of the changes—given what is happening in the market—and employers will see the benefits of directing members to lower-cost, higher-quality providers.

This blog was originally published on November 12, 2013.

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