Benefit Strategy: Medical Networks are a' changin'

As a nod to Bob Dylan visiting Sacramento this Saturday...the times they are a-changin':

Many employers continue to offer their employees significant choice in the way they access care. That means that a full network plan (Sutter, Mercy, UC Davis and beyond) is generally offered next to Kaiser. In order to lower costs, carriers have begun to offer more limited network options.

We now see Sutter only (offered through HealthNet, United Healthcare and soon to be offered by Sutter themselves), Western Health Advantage (offering UC Davis and Mercy), and other limited products offered through Anthem, Blue Shield, United HealthCare and others. Blue Shield recently launched Blue Groove which is an accountable care organization (ACO) model with their partner Hills Physicians.

Kaiser can be considered the "ultimate" accountable care organization as they are their own limited network including the hospitals, medical offices and doctors. Due to Kaiser's integration, many health systems will take years to catch up to them technologically and culturally. They have the benefit of being the insurer and health provider.

But none of this carrier innovation will matter until employers decide to limit their employee’s choice. If an employer is serious about controlling their health care costs, they should consider the inconvenience of change in the short run in order to get long term cost control.

Why? The old model of offering choice is losing effectiveness as the carriers want deeper partnerships with their employer groups to roll out critical care, chronic illness management and wellness programs. Carriers can offer many resources to help an employer control costs such as employee education and wellness resources, but it is difficult to manage in a multi-carrier environment. Carriers want participation and don’t like to share your employees with other carriers. There are a few exceptions, but employers should begin to consider this in their employee benefit strategy.

As hospitals and insurers continue to innovate to reduce costs, they need a willing employer populace to come along for the ride.