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Do you ever wonder what the world would be like if other industries operated the way healthcare does? For example, what if you had to stop at one particular grocery chain and show a membership card to get fresh broccoli? Or what if you could send text messages from your phone freely, but if you needed to send an email, you’d have to get prior authorization from the primary account holder? Or if at the movie theater, you had to shell out $600 to see the latest superhero movie, but if you wanted to watch a “generic” version without the star actors, you would pay just $15.
But you get our point. Health insurance, provider networks, and healthcare costs and payments are all complicated and confusing in a way other goods and services aren’t. Whether you’re a consultant, broker, or benefits manager at a self-insured employer, it’s tough to keep up with the constant changes in the healthcare industry. And you are the experts—this stuff is your bread and butter. Imagine how tough it would be to keep up on how healthcare costs work if you were a graphic designer or a warehouse shipping manager instead.
One of the hardest things for employees to understand is “in-network” vs. “out-of-network” claims. It’s not as simple as choosing a hospital system and sticking with it, or choosing a doctor and seeing them in any office or clinical setting. However, benefits advisers and self-insured employers who are great at “network steerage” are great at benefits cost containment.
Network steerage is the practice of directing employees and members on your benefits plan to in-network doctors, hospitals, and other points of care. A network steerage strategy is crucial for healthcare payers who are looking to tackle high healthcare costs. These networks are carefully negotiated and thoughtfully planned to give patients access to convenient, effective care near them. Large employers or employer groups will sometimes partner with health plans to ensure access to in-network care for their employees and families.
Patients who visit in-network healthcare providers can save thousands of dollars a year for their employers. As well as negotiating the cost of common procedures, employers and other healthcare payers also agree on what patients will pay out of pocket, post-op care, and sometimes even drugs covered on a pharmacy formulary. This creates efficiency and transparency for both healthcare payers and patients that ensure everyone can predict costs and plan for them. Healthcare data analytics is also helpful in identifying and forecasting the cost of healthcare for employers.
Network steerage can also help with health outcomes. Healthcare payers (including self-insured employers and carriers) drive patients to facilities that offer better outcomes and better care. These are known as “Centers of Excellence,” and they aim to provide members with access to doctors and facilities known for high quality health services.
For example, let’s say you tear your ACL playing basketball in a rec league. You know you’ll need surgery, and you want to find an orthopedic surgeon who can fit you in soon. While some patients might start by asking friends for recommendations, those who have learned about network steerage from their employers might take a different tactic. Using a network steerage strategy, your first step should be logging into your carrier’s website and searching for in-network surgeons. You find one nearby that’s labeled “in-network” on the website. You decide to double-check, so you call his or her office, but they tell you that they don’t accept your insurance at the hospital where the surgeon has privileges. So your orthopedic surgeon is in-network, but the place of service is not? Why? How is that possible?
It’s tough for members to understand these nuances of the healthcare industry. While an orthopedist might be in-network for office visits, their hospital association might be out-of-network, and that’s where you’d be having your surgery.
So here’s the next step: check your carrier’s website for in-network hospitals, then choose a surgeon who operates there. Your carrier may have selected these hospitals as part of their network or as Centers of Excellence because the data shows better patient outcomes, a lower re-admittance rate, shorter recovery times, or lower costs for procedures.
Members who don’t go through this process of double-checking their network might find themselves with higher out of pocket expenses. Healthcare data analytics, whether done through a trusted data warehouse, a benefits advisor, or in-house at a large employer, can help illuminate the benefits of network steerage.
Artemis Health helps self-insured employers find opportunities for healthcare savings with employee benefits data. We calculated the out of network spending by procedure to see where there might be cost containment opportunities or member education gaps. Here's what we found:
For each member who has a major orthopedic procedure out of network, it costs the employer over $1,000 in overspending. This is where employee education using healthcare analytics and network steerage can really shine. Self-insured employers, consultants, and brokers in the employee benefits industry should engage in frequent, clear and timely communication with employees to make sure they’re using in-network providers and facilities. It’s good for both parties: employees pay less for great services, and payers do too. And everyone has transparency into healthcare spending so they can make the best choices.
A great network steerage strategy can help employers take crucial steps towards reducing healthcare costs and improving quality for everyone.