The October 10th, 2014 issue of the magazine Medical Economics contains an article entitled, “Study: Narrow networks lead to rise in primary care appointments.”
The article reports on the results of the Massachusetts state employee health plan, which were published first by the National Bureau of Economic Research.
In summary, Massachusetts offered its state employees a 3 month premium ‘holiday’ for their health insurance if they switched to a narrow network.
The results for 2009 – 2012 were then examined:
- Overall healthcare costs went down by 4.2%
- Individual savings on healthcare was 36%
- PCP utilization and spending increased
- Emergency department utilization decreased
- There was no evidence of use of lower quality providers or worse outcomes for those with chronic conditions
Interestingly, these results were the opposite of what the researchers were expecting.
What are the implications for employee benefits professionals for employer-sponsored health plans?
- Increased PCP utilization and spending can result in lower overall spending. This fact has been known in the past, but the Massachusetts experience further solidifies it.
- Premium Differential—i.e. a lower premium for those that exhibit a certain behavior (using a narrow network in this case)—is an effective means of driving employee engagement and lowering costs.
- Steerage to a ‘smaller list’ of providers in a narrow network is one mechanism that can be used to increase PCP utilization. The Massachusetts study found that the distance employees needed to travel for specialists was farther than for PCPs, indicating that ‘location-bias’ (aka a more convenient doctor is more likely to be seen over a more inconvenient doctor) can drive some behavior change.
If you are managing the health of an employee population, (1) Primary Care, (2) Premium Differentials, and (3) Narrow Networks offer a combined strategy that has proven to lower costs while not adversely affecting quality.
Compass also believes in these three approaches and uses them with our employer clients. The piece I would add is that Compass uses our Health ProTM healthcare concierge and technology to give employees tools and support to more easily navigate a still fragmented healthcare system. That Health ProTM ‘glue’ that holds the process together has been a key to our clients’ success.
Click on the 5-min video below to learn how the Compass Health ProTM works: