Value-based networks: Building the right connections

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Sometimes less can be more when it comes to provider choice in a group health plan. The thinking is that limiting network involvement to only doctors and hospitals that focus on the highest possible quality care also will generate fewer costs.

It’s a message that Imagine Health, the architect of high-performance provider networks built on value-based purchasing, is trying to deliver to brokers and advisers on behalf of employers.

The concept resonates with Andy Neary, a healthcare strategist at boutique regional consultant VolkBell, who has been steering his book of business in this direction. But, he adds, there’s an important caveat: “Just building a narrow network doesn’t solve anything. It’s got to be the right network.” To put it another way: high quality must trump lower prices. And if over-diagnosis and unnecessary treatment are contained, then, he says, the switch to this model will more than pay for itself.

“Our clients are done getting beat over the head with a system that’s completely flawed,” says Tracy McConnell, director of IMA Financial Group, Inc., who also works with Imagine Health and sees its vision as a way to reduce waste and an over-reliance on middlemen.

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While outcomes-driven data is difficult to obtain, it’s nevertheless within reach, suggests Chris Cigarran, CEO of Imagine Health. “We spend a lot of time using multiple sources to determine where you are most likely to get the highest quality care,” he says. Given the enormity of life-and-death decisions about healthcare, Cigarran believes they’re important enough to require the use of “deep analytics.”

Systemic problems

Whether through billboards or TV advertisements, Cigarran cautions that many marketing techniques in healthcare aren’t based on facts or data. Instead, the aim is to drive revenue. Another systemic problem with the system is that broad-based PPO physician networks fail to deliver consistent high-quality care or offer much differentiation relative to competitors. He refers to them as Band-Aids that dilute quality standards by letting most doctors or hospitals into their regional or national networks.

Mindful of these flaws, Imagine Health has evolved since 2008 from a tier within broad-panel carrier networks that offered higher quality at a lower cost to a stand-alone solution that focuses on value. An internal analytics team creates algorithms and analyzes data across 38 clinical categories when vetting providers in local markets. “It’s a different way to look at the data,” Cigarran says, noting that it’s also “extremely empowering” and can result in substantial savings.

What’s particularly satisfying is to see those savings trickle down to the employees of his employer clients, according to Neary. “In a day and age when over half of the workforce in America probably lives paycheck to paycheck, providing them care like this can literally change their financial wellbeing,” he says.

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Ironically enough, Imagine Health’s value proposition reflects a move toward more performance-based pay and away from commissions in the brokerage community. “My incentive is perfectly aligned with that of the employer, meaning I can earn more money the more I help them save,” Neary explains. “Right now in our industry, it’s not that way. We either make a commission, or the employer pays us a fee to manage their benefits.”

Most top-performing employers realize they have “a moral obligation to do what they can to get what’s best to their employees and their families,” McConnell notes. “We as advisers have a very deep responsibility to our clients to help them find the best providers and outcomes at the best prices.”

He embraces the opportunity to serve as a change agent. “If you’re an adviser who believes in disrupting the status quo because the status quo is broken, then this is the type of thing that you’ll gravitate toward because you care deeply about the outcomes of your clients and doing what’s right for your clients.”

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Value-based care Healthcare plans Healthcare costs Healthcare delivery Healthcare issues