New network designs drive quality through data sharing
Since their peak in the 1990s, HMO product designs have steadily declined in enrollment. While the emerging narrow- and tiered-network products seem quite similar on the surface, they have distinct advantages over the HMOs of the past.
For example, advanced technology that wasn’t available in the 1990s will allow payers and network providers to share information. Better information allows for improved care and enhanced measurement of quality, which allows payers to be more selective in their provider choices.
“It’s absolutely a result of the industry focus on improving quality and cost effectiveness of care,” says Wendy Sherry, vice president of product development for Cigna.
Narrow networks can direct members to high performers while also rewarding high performers for better care and reduced costs.
“Not all doctors are created equal,” she says. “What narrow and tiered networks allow us to do is recognize and reward those doctors who best manage quality and cost efficiency of care.”
Sherry says Cigna measures providers with accepted industry benchmarks such as readmission rates, choice of laboratory services and use of beta blockers. They’re compared to their peers, and the top performers are considered for best network placement.
Accountable care organizations (ACOs) are ideally suited to become exclusive plan-design networks because most already have robust care service capabilities and, by nature of being an ACO, are already working toward high quality.
“The accountable care movement is about sharing information around quality and cost,” she says. “We’re in an era now where there is greater opportunity to share information.”
However, members tend to have a negative outlook on any design that limits choice. Payers might have to sell them on the advantages of narrow networks.
“Where it becomes negative is for those customers whose doctors, for lack of a better way of saying it, haven’t made the cut,” Sherry says.
For example, it’s especially difficult for members who have seen the same physician for 20 years and have to change because their physician-however pleasant at the bedside-just doesn’t deliver the best quality. Sherry says plans must encourage members to understand the cost and quality proposition.