- Blue Shield of California has seen early success with its ACO product, Trio HMO, and plans to grow its footprint in the California large group market from 200,000 members in 2018 to 700,000 by 2020. Part of Trio HMO’s success may be due to Blue Shield’s contracting with well-known providers, such as San Francisco-based Dignity Health.
- “Historically the narrow network has been a cost play,” said Amy Yao, senior vice president and chief actuary of Blue Shield of California, in an interview with HRI. “Employers are interested in bending the trend but also care about quality. Our ACO products are not narrow network products—they do not target the lowest-cost providers out of the gate. Instead, we focus on those providers who have the will and skill to care for patients in a way that bends the trend. There are early signs this is working; our ACO medical cost trend is coming in a couple of percentage points lower than our non-ACO trend.”
- The Walt Disney Co., based in Burbank, Calif., pursued a direct contracting strategy with Orlando Health and Florida Hospital, launching two new high-performance network plans for Orlando, Fla.- based employees in January 2018.
- “Direct partnerships are a way to improve the customer experience,” said Barbara Wachsman, recently retired director of strategy and engagement, enterprise benefits at The Walt Disney Co. and former chair of the Pacific Business Group on Health, in an interview with HRI. “An important factor in the Disney deal was to improve the experience employees have with their providers. Additionally, being able to interact directly with the provider on behalf of employees is extremely valuable.”
HRI impact analysis
Many providers are positioning for high-performance networks. Sixty-three percent of provider executives surveyed by HRI in 2017 said they plan for their organization to be included in a narrow network plan in the next five years, and 59 percent said they will engage in direct-to-employer contracting in the next five years.
Providers’ capacity to engage in high-performance networks should continue to expand as hospitals and health systems consolidate and physicians increasingly are employed by hospitals and health systems.