It is no secret that employers are always demanding lower-cost healthcare options without any decline in quality. A number of plans are experimenting with narrow, tailored, tiered and other types of health networks designed for employers to tap into for greater efficiency. The basic idea behind designing such networks is to offer lower premiums by limiting the group of providers available to plan enrollees. Narrow network strategy also increases plans’ negotiating power to encourage providers to lower prices, which helps them in maintaining margins.
There were plenty of narrow network products offered in the early 1990s. Patients didn’t like it, especially as the employer changed health plans or the plan changed its network. A flaw in this model was that such networks were designed from the carrier’s perspective (cost and network adequacy goals) and were not flexible to meet the needs of employers and their member population.
We believe a network designed around the needs of employers and members will have a better chance of success than otherwise. Our proposed model is employer centric clinically integrated networks.
Before we start with employer-centric networks, it is important to understand how the narrow networks are designed today by health plans. Typically, health plans start off with their wide network, compare costs for common services, as well as their quality score. Then they create a shortlist based on their network adequacy goals. There may be final tweaks after they start interacting with the providers.
User Centric Design
Employer-centric MSK network design start with employee member population. Create cohorts of your member population. One example of cohorts can be ‘Employees’, ‘Spouse and Family’, ‘Parents’.
Understanding their needs, conditions, budget, social and other goals of each cohort is the next step. Analyze past claims to understand what services were used by members in the cohort. This will help you understand the most common needs of your member population. Categorize these needs into common service categories as preventative, acute, chronic, surgical, rehab and other specialized services. Create a geographical density map of your member data by overlaying member location data on a map against the service usage.
Care Delivery Workflows
After you understand the needs of member population, it is important to design or use workflows that provides the best quality care for each service category to your members in each important location. For example, if you are spending significantly on surgical care in northern california, design the evidence based surgical care workflow (diagnosis, procedure and rehab) for your member population for that location.
Within each workflow, include all services commonly required in general. Don’t get bogged down by exceptions which happen rarely.
Quality & Access
For each step in the workflow, identify providers based on quality and access. For example, if ‘hip and knee replacements’ are more common for your ‘Parent Cohort’ population in Florida, identify which providers have the highest quality and proximity to that group.
Shortlist Clinically Integrated Providers
Consolidate the providers list by service category based on their level of clinical integration. For example. for the above mentioned procedures (hip and knee replacement), if you have two PACs near the hospital with same quality and access, one owned by the hospital and other independent, pick the one owned by hospital. In general, this will be better from care coordination perspective. The purpose is to find the highest quality, most convenient providers who are clinically integrated.
Establish Threshold Fee
Once you have a list of shortlisted providers and service categories, analyze them from historical perspective to determine the threshold fee for the service category. For example, for ‘Hip and Knee Surgery’ in Florida, you paid $15K average for 90% + procedures across the shortlisted 4 hospitals. That becomes your threshold for this surgery.
Create multiple contract scenarios
Now that you have the list of higher quality, most accessible potential providers mapped to relevant service categories for a defined member population, analyze what type of contractual agreement will make sense. Try different scenarios- Bundled, Capitated, FFS, ACO etc. and pick the options best suited from the cost perspective.
Contract Negotiation
It is time to negotiate with these providers on your needs. Your clinical workflows, required services and your terms should ideally drive the discussions. Make sure the selected provider (s) can interface with your care coordination teams and exchange claims, utilization and quality data in electronic format.
Fine Tune your Care Coordination Workflows
Your care coordination workflows should now be fine tuned to include these changes for highest quality experience and utilization management.
At Sprite Health, we work hard every day to help self-funded employers design simpler, lower-cost, higher-value musculoskeletal benefits. Sprite empowers your people with simple, transparent, upfront pricing for services and treatments that address their specific needs. With hands-on support by our concierge, your people get a seamless, personalized experience that makes accessing, understanding, navigating and paying for care effortless.
1 comment