As employers seek high quality, affordable health plans, more options are becoming available

While traditional Preferred Provider Organization (PPO) plans have their advantages, newer players and plan types are gaining popularity

1 Non-Contracted Network Replacement

Replacing a provider network with a non-contracted solution, giving employers and their members more provider freedom and utilizing reference-based pricing (typically using Medicare rates as the reference) to establish payment amount

2 Direct Contracting / Narrow Networks

Contracting approach that allows access to a more limited network of providers, typically curated with a focus on better rates and quality

3 Clinically Integrated Networks (CINs)

Emerging provider-performance oriented network where providers within the network are fully coordinated and share goals around healthcare quality and value; these networks are on the leading edge of the push to value-based care

4 Cash-Pay Healthcare

Cash-pay, also known as direct-pay providers, operate independently of any contracted network rates, and often charge an annual or monthly price for their services. This is often an economically advantageous option, particularly for those without insurance or utilizing high-deductible health plans

1 | Non-Contracted Network Replacement

Drivers of Non-Contracted Network Replacement Growth

For employers that are seeking more aggressive cost containment strategies, reference-based pricing (RBP) often saves 20%-30%+ on overall medical costs
Total addressable market is expanding as employers consider both network replacement and dual option plans. Dual option plans incorporate an element of consumer choice, allowing employees to choose between a traditional PPO plan or a non-contracted network plan at a lower price
Without contracted network restrictions, members under full network replacement plans have broader options for the providers they are able to see
RBP gives employers, members, and payers far more transparency into the cost of services
- RBP companies use numerous data sets to arrive at a fair price for a claim, including Medicare rates, cost-to-charge ratios, and various gap-fill methods such as Medicaid fee schedules and internal sources
Balance bills have historically detracted employers from using non-contracted network replacement plans, but RBP improvements have significantly reduced balance bills over the last several years

Non-contracted network replacement plans account for <10% of overall employer-based plans and adoption is expanding.

RBP leaders enable non-contracted network adoption and are driving growth in the space

2 | Narrow Networks

Advantages of Direct Contracting / Narrow Network Models

Often combined with out-of-network solutions to offer more provider choice while maintaining a consistent level of cost containment
Increases cost-of-care visibility for employers and members
Improved navigation for employers and members, reducing cost and improving outcomes
Access to a targeted, high-quality provider network suited to providing appropriate care to members, enhancing the patient experience, and containing costs effectively for employers
Centers of Excellence are delivering very tangible ROI to large employers by combining high quality care with incentive structures that manage utilization into their networks

Emerging Trends in Direct Contracting and Narrow / Specialty Networks Include:

A Narrow network “enablers” and large health systems working to administer narrow network plans and provide pricing, care management, and other services to employers

B “Centers of Excellence” and other innovative, bundled payment models

Benefits of Clinically Integrated Networks

CINs offer excellent flexibility, allowing them to be used as a foundation to establish ACO contracts
Incentives are aligned between payer and providers, meaning both parties share upside and downside risk, and all constituents are motivated to enable the best outcomes in the most efficient, cost-effective manner
The legal framework around CIN partnerships allow for data-sharing between providers; this improved interoperability means more efficient care delivery and improved outcomes

3 | Clinically Integrated Networks (CINs)

The Progression to Clinically Integrated Networks

4 | Cash-Pay Healthcare

Cash-pay healthcare is a new trend gaining increasing popularity in the market as both a replacement to traditional health plans and a supplement to them

Cash-Pay Healthcare Advantages

Cash pay healthcare is particularly effective for routine visits and simple procedures, often resulting in up to 40% savings for patients that pay cash
Resources are becoming increasingly available which offer provider pricing transparency for services with cash payment
Can be utilized as a standalone option for uninsured individuals, or an additional option for those using traditional PPO plans
Beneficial to both patients and providers, as cash pay eliminates administrative provider tasks that can take up to 40% of their time