Consumerism in health care is based on the idea that individuals should have greater control over decisions affecting their health care. A number of innovative products are advancing the consumerism trend, including high-deductible health plans, Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs).
Another innovation linked to consumerism is the advent of performance networks. These networks are becoming part of a broader effort by insurers and employers to curb rising health care costs by identifying physicians who, by meeting certain measures, provide high-quality care in a cost-effective way. Performance networks, along with other network options, can offer more health care choices by giving employees information about physicians who have met certain cost and quality criteria.
“Performance networks are an emerging strategy for employers who want to manage health care costs and improve quality. They are an important step in the evolution of health plans’ efforts to moderate employer costs while maintaining a focus on quality of care,” says Bill Berenson, vice president of sales and service for Aetna’s North Central region.
Smart Business spoke with Berenson about performance networks and how network products are becoming more enticing to employers looking for targeted strategies to manage medical costs.
What are performance networks?
Performance networks are tiered and narrow networks that recognize physicians who perform well against a number of clinical and cost measures. These networks are essentially a variation of a long-standing practice of providing one level of benefits to employees who use in-network providers and another level of benefits for out-of-network providers. The introduction of high-performance networks is also part of a larger movement to sensitize employees to the real cost of health care and drive lower costs while maintaining or enhancing quality.
Why are health insurers offering performance networks?
In response to growing interest from employers who want to control rising health care costs, health insurers are developing performance networks to promote access to selected physicians, hospitals and other providers who have been identified as delivering care that meets both quality and cost-efficiency standards. Often, these are offered as tiered benefit plans with enhanced benefits and lower out-of-pocket costs. Because these networks are designed to yield better outcomes and lower costs, national insurers and many regional and smaller health plans are actively developing network products that encourage their members to seek care from selected providers.
How do performance networks function?
While there are many similarities, not all performance networks are the same. How they function varies by health insurer. Performance networks should measure the overall effectiveness of a provider’s care by carefully balancing measures of clinical performance and efficiency.
How are physicians chosen for performance networks?
Generally, physicians who participate in performance networks are chosen based on meeting certain quality standards as well as their use of health care resources, such as case volume and use of those resources over an episode of care. The health benefits plan would then be structured to give enrollees an incentive to seek care from designated specialists when specialty care is required.
Do employers have to pay extra if they offer their employees a performance network option?
Depending on the insurer, self-insured plan sponsors who purchase a performance network may pay a slightly higher administrative services fee. However, customers also may experience savings in claims as a result of the networks’ focus on mitigating medical costs.
Are primary care physicians included as part of performance networks?
It would depend on the insurer. A performance network may include a health plan’s participating primary care providers, specialists, hospitals and other health care professionals. Aetna has chosen to focus on establishing a performance network based on specialists, because specialty care is driving most of the advances in procedures, pharmaceuticals and diagnostic imaging, and the increases in cost that accompany these advances.
Why should employers offer their employees a performance network option?
Performance network options provide access to quality care that may be more cost-effective and result in increased savings to both employer and employee. When paired with the proper incentives and plan design, a performance network option can help employers realize the full savings potential offered by participating physicians.
As more employees take responsibility for their health care decisions, the ability to find health care professionals who provide quality, cost-effective health care is increasingly important. For more information about performance networks and how they can help employees achieve a balance of quality and cost-effectiveness in their health care, speak with your insurance broker.
BILL BERENSON is vice president of sales and service for Aetna’s North Central region. Reach him at (312) 928-3323 or [email protected].
