In an era of expanding access to health coverage, it’s hard to overstate it: Cost is paramount for consumers. A recent report from the Center for Healthcare Research and Transformation, a nonprofit partnership between Blue Cross Blue Shield of Michigan and the University of Michigan, found that a whopping 92 percent of respondents with individually purchased insurance reported that cost was a very important factor in selecting a health plan. That’s why Blue Cross Blue Shield of Michigan and Blue Care Network are making local networks more available to Michigan residents.
What exactly is a “local network”?
Put simply, a local network provides local access to high-quality care at a lower cost. While it’s admittedly a different direction for a company known for providing unparalleled access to care, local networks are a viable alternative for consumers who are willing to trade broad access for lower premiums, all while maintaining the highest quality in patient care. Our long history of working together with providers to improve health care has given us the ability to develop innovative products that offer increased value for consumers. Under a local network, a patient’s medical care is managed by physicians, specialists and other providers who are typically affiliated with a single health system so that care is more coordinated and efficient. Care received outside the local network is considered out of network and carries higher costs.
Why are local networks needed?
Again, it comes down to cost. The Center for Healthcare Research and Transformation found that 41 percent of respondents with individual coverage said the number of providers they could choose from in a health plan was important to them in selecting a plan. That’s less than half the number that identified cost as being important. What’s more, eighteen percent of respondents have switched their primary care physician because of their individual insurance plan, suggesting that consumers may be willing to accept local networks if costs were reduced. “Our country faces a big challenge when it comes to the cost of health care and we have to find ways to keep those costs from growing,” said Sue Barkell, senior vice president of Health Care Value at BCBSM. “I think this a really exciting time in health care and it is time for a change in the way care is delivered.”
What is Blue Cross doing to make local networks more accessible?
So far, Blue Cross has experienced success with local networks in both West Michigan and Southeast Michigan. We have local HMO plans in Metro Detroit and West Michigan. Local HMO plans give you the savings of a local network and the benefit of a primary care physician that coordinates your care. With these plans, members choose a primary care physician in their plan’s network. Their PCP will then refer them to in-network specialists as needed. “We have partnered with providers that are really focused on improving the quality of care, which translates into lower costs,” said Kevin Klobucar, CEO and president of Blue Care Network. “It’s about better coordination of care and appropriate utilization. These kinds of products really require providers to be engaged in caring for their patients.” We’ve also had success with a local “EPO” plan in Metro Detroit, which was announced in January 2014. While you may be familiar with HMO and PPO plans, EPO plans are a bit different. EPO members get care from doctors and hospitals in their network and can visit specialists without receiving a referral from a primary care physician. Care outside the network is only covered during emergencies. This is a great option for those who are looking to save money and stay close to home to get care.
What’s the bottom line?
Of course, traditional plans that offer broad-access networks are still available for those who want them. But local networks offer a price tag 15 to 20 percent lower than traditional plans. That can be the difference for many people who don’t have a lot of room in their budgets for health care but who want to be covered. Like this blog? You may also be interested in these articles:
- Getting “Under the Hood” on Individual Health Insurance Rates
- CEO Dan Loepp: Much Work Remains to Truly Reform Health Care
- Organized Systems of Care: Health Care That Works for Patients
Photo Credit:Steven Depolo