As companies continue to look for ways to contain healthcare costs, medical carriers are offering a strategy to help – narrow networks. In exchange for a smaller pool of providers and facilities available to members, companies can offer lower premiums and out-of-pocket costs for plan participants.
Narrow networks grew in popularity last year, as Aetna and Cigna launched local versions, and Blue Cross of Kansas City expanded its Spira Care offering. We will be watching closely to see final enrollment statistics, and just as importantly, how the member experience goes.
Know your options
In the Kansas City market today, there are three major narrow network programs. All of them limit benefits to a relatively smaller network of providers, but offer the potential for meaningful savings.
- Spira Care and Blue Select Plus from Blue Cross and Blue Shield of Kansas City: The Blue Select Plus network uses a more limited network of doctors and hospitals, which include Children’s Mercy, Liberty Hospital, North Kansas City Hospital, Olathe Health, Shawnee Mission Health, Truman Medical Centers, and The University of Kansas Health System. Out-of-network benefits for members exist for providers that do not participate in this network. Another option, called Spira Care, includes access to Spira Care Centers, which offer a number of services at no cost to the member. In addition to these centers, you have access to the doctors and hospitals in the Blue Select Plus network. However, for non-emergent care in the 32-county service area, there is no out-of-network coverage.
- Cigna’s SureFitTM network combines medical, pharmacy and behavioral health benefits with enhanced care management. Its network includes HCA Midwest Health, Children’s Mercy, North Kansas City Hospital, and other providers.
- Aetna’s “high-performance network,” called I-35 Network, includes Children’s Mercy, North Kansas City Hospital, Shawnee Mission Health, and The University of Kansas Health System.
Understand the trade-off for the plan
The basic idea of a narrow network is that by sending more people to a handful of providers, you receive a bulk discount. It is important to consider who gets that savings, and confirm the exchange is fair, and worthwhile for your company. Your broker can help you see where the savings would be, and decide whether it is worth the trade-off.
Understand the trade-off for employees
The employee savings from narrow networks can come through their monthly premiums, deductibles, co-payments, and out-of-pocket costs, depending on your plan design. Most employers are offering these networks as an alternative to medical plans with broader networks, but a few are offering a narrow network plan as their only option.
Helping employees fully understand the trade-offs of the narrow network plan is critical to their success. Some will choose the lowest-cost plan without considering the consequences they might experience. They could be surprised if they inadvertently seek care from a provider outside the network, or receive a difficult diagnosis and realize their options for physicians and hospitals are restricted. Some narrow network plans provide no out-of-network benefits at all.
Before choosing a narrow network, you might want to analyze how many employees would be displaced based on their current provider choices. You can also analyze the fit of a narrow network based on where your employees live.
Regardless of which network you choose, you will need to be completely transparent with employees about the trade-offs they could be making as they enroll. You might even want to require a one-on-one session with an enroller when including a narrow network option. Be sure to list a sample of the popular local hospitals that are NOT in the plan.
Consider communicating after open enrollment, too, because it is easy for employees to forget what they learned when enrolling, and be surprised when they try to use the plan later in the year. You can offer training on how to make the best use of the plan – especially when choosing a provider or hospital.
As you evaluate narrow networks, include your growth plans in the discussion. How do your potential new locations fit with the locations of the hospitals in the narrow networks? If you have multiple locations today, will you offer access to narrow networks in all of them? If not, how will you communicate the difference in choices to employees in various locations? Companies that have locations without a narrow network option may want to produce separate brochures, presentations, and other materials. HR staff also have to be prepared to explain the disparity in choices among locations.
While narrow networks can promise savings of 10 percent or more, they are not a silver bullet, and they are not a good fit for everyone. However, they are growing in popularity, and they deserve a careful look.