In provider networks bigger not necessarily better … or worse

#5in5_Blog_BannerAs the health care industry adapts to the Affordable Care Act and value-based care, provider networks and their size are making news.

Insurers are ditching large preferred provider organizations in favor of narrower networks.

The appeal is easy to see.

In a Huffington Post blog, President and CEO of the New York State Health Foundation James R. Knickman explained how narrow networks give health care payers more bargaining power and therefore the ability to control costs.

Jeremy Earl, a partner in a health industry advisory practice, wrote in Managed Healthcare Executive that narrow networks help ensure that the volume of patients matches the volume of providers willing to accept value-based payments.

But there is worry that narrow networks could limit access to care and leave people with rare conditions without an option for coverage. The federal government and some states are considering rules to keep networks robust.

Big or small, wide or narrow — if you’re only concerned about size, you might be asking the wrong questions.

Health systems that take on patient risk must build a provider network that matches their risk.

Rather than trying to build the largest possible network of physicians, the focus should be on having the right providers in the network. The right providers are those that perform best on quality and cost measures as well as patient satisfaction. The right providers also match the services the health system is tasked with providing.

To learn methods for finding providers who share your system’s priorities and culture, check out a #5in5 podcast .You’ll hear about the tools you need to find providers and the biggest danger to relying on old, word-of-mouth recommendations.

About the author

Elena WhiteElena White currently serves as vice president of the Risk Quality & Network Solutions division for Optum. She has more than 18 years’ experience leading network optimization initiatives, network development and expansion, business planning, provider reimbursement development, transformation to risk-based arrangements and medical cost management strategies for both health plan and provider organizations.

Elena holds a bachelor’s degree from University of California at Riverside and master’s degree in business administration from Loyola Marymount University.

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