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Readers Write: Narrow Networks: Blessing, Curse, Should You Care?

May 23, 2014 Readers Write 1 Comment

Narrow Networks: Blessing, Curse, Should You Care?
By Shawn Wagoner

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Narrow networks = blessing. In its recommendations to improve the government’s ACO programs, the American Hospital Association is urging CMS to “create some financial incentive on the part of the beneficiary to choose to stay ‘in network’ so that their care can be coordinated.”

Narrow networks = curse. In Seattle and New Hampshire, healthcare organizations are taking legal action to prevent health plans from developing narrow networks.

Narrow networks = real. Regardless of where an organization falls on the blessing vs. curse spectrum, narrow networks are back and gaining momentum. McKinsey research finds that 70 percent of the plans sold on the individual exchanges created as part of the ACA are what they categorize as narrow and ultra-narrow hospital networks. There is also serious traction among the private sector companies that help finance health insurance for their employees. As evidence, a commercial health plan in Minneapolis now has roughly 30,000 members enrolled in private exchanges and over half of those enrolled have chosen a narrow network benefit product constructed around one of four available ACOs.

Former ONC Chief Dr. David Blumenthal recently wrote about narrow networks, suggesting that “by guaranteeing their chosen caregivers a certain volume of business, health plans acquire the leverage to negotiate better prices in future contracts.” The private exchange example from Minneapolis suggests that providers also agree to higher quality and patient experience standards in addition to the price concessions. In theory, these narrow networks have the potential to benefit all stakeholders:

  • Health plans pay lower prices to providers and can package those lower prices into lower cost and higher quality benefit products to attract consumers and members.
  • Consumers pay lower premiums to the health plans for higher-quality care.
  • Providers are assured that the members will use their services when the need arises. Additionally, more people than before will use their services because the lower-priced narrow network benefit products attracts new patients.

Chances are that most organizations have a strategic plan that includes some form of a narrow network, whether a clinically integrated network, an ACO, or in many cases, both. Given their strategic importance and operational complexities, now is the time to start thinking about how to operate a narrow network effectively.

Recall the advent of high-deductible health plans a decade ago and how quickly patient responsibility grew as a percentage of revenue and the amount of process and technological change required in response. Likewise, narrow networks bring forth new yet similar challenges that will require a great deal of process change and technological advancement. Here are some thoughts to help assess the readiness of an organization:

Challenge #1: Patient transitions require improved coordination to track patient status in order to deliver on the higher quality standards and realize the financial benefit by ensuring patients are transitioned to in network providers.

Operational considerations:

  1. Can pertinent portions of chart notes be shared among all in-network providers?
  2. Does an automated workflow exist to book follow-on appointments for in network providers, both employed and affiliated?

Challenge #2: Narrow networks typically incent patients to stay in network for care by making it more expensive for them to have treatment with an out of network provider.

Operational considerations:

  1. Is a system in place to respond to patient inquiries for whether a given provider or facility is in their network?
  2. Can providers easily determine who is in and out of network when they are recommending follow-on care?

Challenge #3: Patients who choose narrow network products are cost conscious and expect their clinicians to be as well.

Operational considerations:

  1. Are clinical protocols broadly adopted that address the appropriateness of care so that patients are not faced with medical bills for unnecessary care?
  2. Are workup requirements established so that patients do not arrive at an appointment to find out key steps were not completed and therefore additional appointments are necessary before coming back?

Challenge #4: Patients have traded broad access via a wide open network of every provider and facility for a limited access option. However, limited access only refers to the number of physicians and facilities, not the ability to be seen in a timely manner.

Operational considerations:

  1. Are the individuals who handle inbound requests able to quickly view availability for all services within the narrow network to ensure the patient can get a timely appointment?
  2. Is this the time to start allowing patients themselves to book their own appointment online?

By no means is this an exhaustive list, but it should help quickly determine how prepared an organization is to support a narrow network strategy.


Shawn Wagoner is president of
Proximare Health of Savannah, GA.

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One Response to “Readers Write: Narrow Networks: Blessing, Curse, Should You Care?”

  1. 1
    Fourth Hanson Brother Says:

    Great article!

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