Plans like SaveNet help employers reduce costs while saving benefits
Narrow networks are coming to the North Bay.
So-called “narrow” or “skinny” networks have been used for some time by carriers, but recently, San Francisco-based Blue Shield has been expanding its SaveNet HMO and other similar networks across the state as a way to offer employers more affordable options in lieu of increasing health care costs, according to David Joyner, senior vice president for mid and large specialty benefits for Blue Shield.
“One of the things we’ve been doing is finding lower price points for some of our employer groups,” Mr. Joyner said. “One of the ways you can offer a lower price point is with a narrow network.”
Similar SaveNet expansions either have or will occur in Santa Clara and Sacramento counties. “And we’ll have an expansion of that same network into Marin and Sonoma counties, where historically we haven’t had that option,” Mr. Joyner said.
Blue Shield has taken other measures to control costs on employee benefits recently, notably the roll-out of eight accountable care organizations throughout the state. Such ACOs are a product of the Affordable Care Act, which are overseen and encouraged by the Centers for Medicare and Medicaid to coordinate care among providers and health plans.
The narrow network is less in response to health care reform but rather financial stress borne out of difficult economic times for employers, Mr. Joyner said, adding that the narrow network in the North Bay could eventually become an ACO but that it’s too soon to say definitively.
Blue Shield will have the same hospital network, but it will offer a smaller network with about 100 primary care physicians from Meritage and Sonoma County Primary Care, a small independent practice association with ties to Petaluma Valley, Palm Drive and Santa Rosa Memorial hospitals. The network will also contain 325 specialists in Marin and Sonoma counties.
A larger, more traditional network would typically allow employers to use more physician groups and IPAs in their health plans, such as Sutter Health-affiliated groups or Hill Physicians, for example. A narrow network such as SaveNet, however, offers employers fewer providers in exchange for lower premiums and other savings.
While it’s not a new concept, there has been increased usage of such networks, Mr. Joyner said.
“Customers are really focused on affordability. This is a way to get a lower price point without cutting the benefits,” he said. “As more employers struggled with the economy, with a few notable exceptions in Silicon Valley, you’ve seen a greater willingness to trade off broader networks for more narrow networks.”
In the North Bay, it will be offered only to employer groups due to continued uncertainty in the individual market, as health exchanges are rolled out as part of the Affordable Care Act. The state’s exchange, Covered California, is poised to launch in 2014 and will enable individuals and small employers to shop for affordable health plans. Blue Shield said it did not want to offer an individual plan in 2013, only to have to make substantial changes come 2014 as regulation and requirements of the exchange are developed.
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