Don't Forget the Basics: Network Accessibility
Websites, mobile applications, data, wellness engagement and utilization statistics are just some of the important resources used for health insurance programs. But behind all these resources there’s still the basic blocking and tackling of managing a program. Benefits managers should still understand the basics of what drives the majority of costs in their program and ensure they’re selecting the correct carrier to partner with.
Probably the biggest single factor in ensuring your carrier is right for you is a combination of network match and average network discounts received. Most insurance carriers have moved to a two-tiered network approach: a large, expansive network that includes better than 90% of the providers in the market, all within about 3% average discount of each other, and tighter networks that may feature 70% of providers at a marginal discount advantage of 10%-25% from the larger network program. Finding the tighter network that fits your population can bring substantial savings to the plan.
Carriers like to focus on network accessibility or the average distance an employee would need to travel to find at least two network providers. The reality is your employees define the quality of the health plan on whether or not their provider of choice is a network provider. So, while you may have ample providers within a short distance of your employees’ respective homes, if their doctor isn’t in the network they’ll think you bought a substandard plan.
The best tool to evaluate a network match for your population is a disruption analysis. To run a disruption analysis, you must provide to the quoting carriers a claims report by provider, identifying the provider by tax ID number (T.I.N.) along with the number of claims, unique claimants and dollars eligible (before discount). The quoting carrier can then identify which providers are in their various network offerings, allowing you to determine which carrier is the best fit for your populations.
The network disruption is only part of the equation. The other part is the average discounts for the network. To ascertain this piece of information, you need to request a re-pricing analysis. Carriers need to shield their respective discounts due to their proprietary nature and will only provide a total spend estimate. The required claims report is very similar to the disruption report, so you would want to have the quoting carriers provide both a disruption and a re-pricing analysis. The disruption should identify which providers are in and which are out-of-network, and the re-pricing would provide the estimate of what you would spend under their program (in total).
These reports combined can give you a picture of whether it’s feasible to offer a carrier’s multiple network platform (multiple plans with different benefits and networks for employees to choose). It may turn out a carrier that has a slightly smaller expansive network than the other carriers actually offers a better fit for your population in their tight network alternative. Depending on the network match and average discounts, the carrier you may have shied away from in the past may turn out to be the partner you’re looking for.
For more information on network accessibility, contact a member of the ‘A’ Team today.
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ABOUT THE AUTHOR
John Storto is a Principal at Assurance. John’s expertise is managing large, complex benefit programs for employers ranging in size from 100-20,000 employees. John takes a hands-on approach to learning about a client’s organization in order to develop a program that truly supports their organizational objectives. John is a graduate of the University of Michigan, where he earned a Bachelor's degree in Economics.