From cutting the cable cord to buying “tiny homes,” consumers today are taking a hard look at the value of their purchases. This trend toward value has come to health care in some big ways, too.
Narrow network plans are a viable alternative to plans with broader networks that usually come with a heftier price tag. In narrow network plans, insurers scale back the number of doctors and hospitals a patient can visit in order to negotiate a lower cost for services. These plans are a popular choice among individuals who buy their own insurance.
In fact, their popularity has caught the attention of a new insurance provider backed by Google, which plans to reduce its network of doctors and hospitals by half next year. Employers have also started to take note, and we expect to see them adding these plans into their benefit designs at a faster rate.
National studies and market behaviors show that consumers are willing to give up some choice to save money on health care. And that’s no surprise, considering that health care is one of the fastest-growing expenses in a household budget.
Here in North Carolina, the market has spoken loudly.
Our customers are increasingly choosing limited networks of providers in exchange for lower premium payments. In 2015, a majority of ACA customers in the metro areas of Raleigh and Charlotte had already chosen lower-cost plans with a more limited network of health care providers.
It’s an interesting trend in a state that has had a relatively low prevalence of narrow networks. In 2015, 13 percent of networks in North Carolina were considered narrow compared to 83 percent in nearby Georgia, according to a study by the University of Pennsylvania.
In contrast, our Platinum plans – which typically had the highest premiums for the highest level of benefits – were not popular. We reported in May 2016 that fewer than three percent of our members chose those plans in 2016. As a result, we eliminated those plans from our 2017 offerings.
The Big Choice: Managing Costs
A narrow network is generally defined as providing access to between 30 percent and 70 percent of physicians in an area, according to a 2014 study by McKinsey & Co. Size varies greatly, but one common goal for these plans is that insurers seek out physician practices and hospitals that show an ability to provide high-quality medical care at a reasonable cost. This is backed by evidence that shows plans with narrow networks on the exchange provide quality that is equal to or even higher than the quality of broader network offerings.
For cost-conscious consumers, there’s even more good news. The McKinsey study put premiums at 17 percent lower than broader network plans. Blue Cross and Blue Shield of North Carolina (Blue Cross NC) customers who purchased narrow network plans for 2016 coverage saw savings in that same ballpark.
Signing up for a narrow network plan? Here are some tips before you buy:
- Check to see that the health plan you want includes your preferred physicians and hospitals in the network and can pay off in the future. Look up the primary care physicians, pediatricians and specialists you can’t live without, and make a note of which plans these providers participate in.
- If your ideal providers don’t all participate in the plan you’re considering, then look for a good alternative. Take the time to find an in-network provider, transfer your records and get established with that provider before you get sick.
- BCBSNC offers a provider search function that’s more comprehensive than searches on gov. It’s also more timely: We update all results twice a week, compared with the monthly updates you’ll find at the federal site.
Paying Less to Get Better?
Another reason for the shift to narrow networks is the emphasis on quality of care. What people may not know is that many narrow network plans encourage coordinated health care and even help physicians to offer more personalized care. Some of the health systems in our narrow networks love the fact that they can better coordinate the care of each patient, have all of the patient’s information on one electronic medical record, and allow the doctors to work together for a better health outcome.
In addition, research shows that many high-priced hospitals don’t necessarily score better in objective quality measures such as mortality rates after surgery. We’re beginning to break down the misconception in health care that a higher price tag means higher quality of services.
Another little-known fact: The doctors in a narrow network may not necessarily be paid according to how many services they perform on you as a patient or how many times you show up in the office. The goal is to get and keep you healthy. Oftentimes, the payment aligns with this goal. This approach benefits everyone involved.
Consumers Need Information
Narrow networks succeed only when health plans and providers give consumers more information to make wise choices about their care. It’s fair to say that some consumers have had trouble finding information about which providers participate in health plans. Blue Cross NC constantly gathers information from doctors and hospitals across North Carolina and publishes frequent updates to its provider directory.
We also make cost estimates available to the public – not just our customers. The estimate shows how much someone can reasonably expect to pay for more than 1,200 medical procedures. It’s one way for consumers to understand the great variance in cost among providers who deliver the same standards of care.
As health care costs continue to climb, insurers play an even more important role in making sure you get the best value for your money. Our narrow networks will continue to evolve in response to consumer needs, with this goal in mind.