At the risk of appearing tone deaf, we think it’s time for employers and other health care purchasers to give high-performance network plans a serious look. Yes, we realize employers are stressed about recruitment, retention, and engagement. And the latest data confirms there is a severe talent shortage. According to the Bureau of Labor Statistics, as of April 2022, 4.4 million people quit their jobs, 11.4 million job openings remain unfilled and the unemployment rate was just 3.6%. What employer in their right mind would offer a health insurance plan that limits which health care providers their employees can see?
Before you quit reading, consider that a high-performance network doesn’t have to be the only plan an employer offers. It’s likely that an employer would want to continue offering the option of a PPO plan with the broadest network of health care providers. Keep in mind, however, that unlike in the past, now we know a fair amount about how much the price and quality of care varies among health care providers. Is leaving plan members to play pin the tail on the donkey when choosing a health care provider among the broadest network of providers the best we can do? And as health care prices keep rising and now account for 70% of the increase in the cost of health care these days, is it really smart not to scrutinize and, at least, offer an option that is more selective about the providers in the network?
Maybe you think high deductible health plans solve for this. They certainly make plan members think twice about seeking health care services, saving the plan money – at least in the short run. But HDHP plan members also defer seeking the services they need to stay healthy and there’s little to no evidence that HDHPs encourage plan members to find providers of the highest quality or offering the best price and quality combination.
That’s why we think it’s time. Not many purchasers offer a high-performance network plan today. According to the Willis Towers Watson 2020 Health Care Delivery Survey, just 18% of the almost 400 employers surveyed offer a high-performance or narrow network in one or more locations. Another 73% say they plan to adopt or expand new delivery models such as centers of excellence or high-performance narrow networks over the next 3 years, though we find that employers tend to overestimate how much they are likely to shift their strategies in the future.
An alternative to high-performance networks could be strong and effective navigation support for plan members, helping connect them to high value providers. But just 17% of employers responding to the Willis Towers Watson survey offer navigation services.
Some of the most sophisticated employer-purchasers we’ve worked with have successfully launched high-performance networks, garnering higher than expected initial enrollment, high satisfaction, as well as plan member retention in future years. They did this, in part, by improving the patient experience with greater after-hours and/or virtual access and navigation support. The savings from narrowing the network can allow for enhancements that make health insurance offerings more attractive, like richer benefits, lower contributions, or greater patient support in the form of navigation help or concierge services. Strong communications about how the plan works are also key. Luckily for you, CPR worked with three leading employers who implemented high-performance network plans centered around an ACO or direct provider contract to create a communications toolkit you can use.
Purchasers, you’ve long embraced your role as plan fiduciary from a financial perspective. It’s equally important to expand your fiduciary role to include quality by directing your plan members to high quality (and lower cost) providers. By offering a high-performance plan option, you’re also supporting your business’ ability to recruit and retain talent.