High-Performance Health Plan Networks: Early Experiences

News Release
May 2, 2007

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—Despite broad interest among employers and health plans, a nascent move to steer patients to physician specialists who score well on efficiency and quality measures is off to a slow start, according to a study released today by the Center for Studying Health System Change (HSC).

So-called high-performance networks are a recent addition to the tools that health plans and purchasers are using in an attempt to curb costs and improve quality, the study found. The hope is that if these networks influence enough enrollees to shift to higher-performing providers, physicians losing market share might be motivated to improve efficiency and quality to better compete.

"High-performance networks have gained a toehold in such markets as Boston, Milwaukee and Seattle only when large employers have been aggressive in pushing them," said Paul B. Ginsburg, Ph.D., co-author of the study and president of HSC, a nonpartisan policy research organization funded primarily by The Robert Wood Johnson Foundation.

In Boston, for example, the state agency that administers public employee health benefits required contracted plans to develop and offer high-performance networks, while the business coalition in Milwaukee was key in bringing Humana’s high-performance network product to the market. In Seattle, Aetna has sizeable national accounts, including Boeing, Costco, Nordstrom and Starbucks, which were active in helping to launch a high-performance network. Even in these markets, however, enrollment in high-performance networks has not expanded much beyond the initiating employers, the study found.

Funded by the California HealthCare Foundation, the study’s findings are detailed in a new HSC Issue Brief-High—Performance Health Plan Networks: Early Experiences—available here. The study was based on interviews with about 20 organizations between May and September 2006, including representatives of national health plans and regional plans offering high-performance networks in Boston, Milwaukee, Seattle and California, as well providers, employers and benefits consultants in those markets.

"Employers pushing high-performance networks reported feeling as if they are out there alone and everyone else is ’window shopping,’ until there’s more results on service use, costs and quality," HSC Senior Researcher Debra A. Draper, Ph.D., a study co-author along with Allison Liebhaber, an HSC research assistant.

The study also found that physicians typically responded to high-performance networks with skepticism, with the most common complaint being lack of communication from health plans. Physicians also had issues with the methodologies used to determine high-performance designations, questioning the data quality and whether sufficient sample sizes were used.
Physicians also complained about the lack of standardization in methodologies. Plans define high-performance networks differently, so some physicians are designated as high performing in one plan but not another, leading to general skepticism of these networks and the methodologies used to create them, according to the study.

Early lessons learned from the fledgling development of high-performance networks include:

• Communication with providers—Several plan executives noted the importance of working with and educating physicians months in advance of either going into a market or introducing a new product or initiative. As one physician representative commented, "If you don’t include your soldiers who deliver your care during the development and vetting of the product, then you lose from the beginning. The plans that included the physicians at the beginning did a lot better than those who just came at us."
• Costs and quality both key—nearly all respondents said that the success of high-performance networks is dependent on an assessment of both costs and quality since high-quality care can be delivered inefficiently. In the early iterations of high-performance networks, much of the focus has been on the cost-side in large part because of limitations in the integrity and sophistication of the quality data. Respondents all agreed that improved data are needed.
• Standardized industry measures—respondents discussed the need for the industry to move toward more uniform standards of provider performance measurement. One plan executive, for example, expressed concern that physician quality determinations should not be based exclusively on data one plan holds. He commented further that industry collaboration from both the public and private sectors is needed to make informed decisions about the quality of a practicing physician.
• Purchaser support—employers are often reticent about getting involved in pushing development of a high-performance network. As one plan executive commented, "The most fascinating piece of this is that the employer wants it, the health plan builds it, implements it, and then the health plan gets the heat, and the employers who wanted it duck and cover."

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.