Contributor: Bill Melville
Topic: Narrow network health plans
The wave of narrow-network health plans has not yet crested, and an early adopter remains in the best position to ride out the trend. California-based Health Net has quickly emerged as a leader in the narrow-network movement.
At the second annual National ACO Congress in Los Angeles, Health Net executive Steven Sell said tailored network products have generated interest and enrollment at a time when the rest of the commercial market is flat.
Now, after several years running tailored network plans in California and Oregon, Health Net is expanding its provider-focused design to Phoenix by launching ExcelCare, a plan built around Banner Health’s provider network.
The nonprofit Banner Health is among Arizona’s largest providers and one of its most innovative. The hospital system made the news recently when the Centers for Medicare & Medicaid Services selected Banner as its first Pioneer accountable care organization. While Health Net’s tailored network products are not ACOs, the level of coordination, data and quality analysis definitely fits the concept’s tenets.
Carriers across the country have launched or are considering narrow-network plan designs, some of which may be precursors to the upcoming health benefits exchanges. But narrow networks are not a knee-jerk reaction to the market. Health Net took years to craft its narrow-network focus in Phoenix.
Its narrow-network strategy began in California with a Latino-focused network (Salud) and has since expanded to a network built on the University of California medical centers (Blue & Gold) and a Sacramento plan with Sutter Health (Premier Care). Although products in California initially sold slowly, a bad economy, coupled with employers looking for lower premium rates, have raised their profile in the West.
Sell said the carrier has not taken a one-size-fits-all approach to its tailored networks. Health Net has been deliberate with its network deals, analyzing data and quality measures to seek out the best regional partner. Health Net also differs from most insurers because all of its commercial business is fully insured, and much of its membership already receives care in capitated settings.
HMOs have waned in Phoenix and elsewhere, but healthcare costs have not. Phoenix’s economy still feels the sting of the recession and housing market collapse. Fully insured employers who want a steadier cost trend and high-quality providers will turn to tailored products. Health Net’s ability to launch tailored network products in the heavily regulated California market bode well for their chances to succeed with Excel Care in Phoenix.