Debunking the myths about “narrow networks”

Employers are looking for different and better ways to contain health care costs. One variable that determines the cost of a health plan is the network – a list of doctors and hospitals that members can see. The same plan with a different network can mean significant differences in monthly premium costs.

If an employer wants a more economical premium cost, choosing a plan with a limited (or narrow) network may help. Those who want greater choice may pay more for access to a network with more providers. All networks include all specialties, but a smaller network may offer only two orthopedists, for example, while a larger network may offer 10 or more.

Here’s a look at why and when a narrow plan can be a good option.

An employee working on her laptop inside an office

What is a “Narrow Network”?

Narrow networks are comprised of local, community-based medical providers who are invested in the health of their communities. Providers in these plans have demonstrated their ability to practice and deliver care more efficiently and cost effectively by focusing on health outcomes instead of more services.

Narrow networks help lower costs while maintaining benefit levels. So why are some employers still on the fence when it comes to offering these plans? It may have to do with these three common misconceptions.

Myth 1: All the cost savings come from lower premiums.

Narrow networks do reduce premiums, and that's a huge draw for both employers and their employees. But consumers also benefit from these plans through lower overall out-of-pocket expenses.

So how do these plans work? Narrow networks contain longer-term costs by encouraging individuals to develop a relationship with their primary care providers (PCPs). Cost savings comes from increased use of PCPs and decreased (or more-efficient) use of specialists.

Myth 2: Employees aren’t interested in narrow networks.

Many employers assume that offering a comprehensive plan, constitutes use. But this overlooks a fundamental need for education and communication that enables effective utilization of broad network plans.

By encouraging preventative care, narrow networks increase touch-points with PCPs, who become the navigators to specialists. Having a collaborative community of doctors eliminates the confusion that often comes with self-directing and coordinating care, while also helping to achieve and maintain health.

So it's not that employees aren’t interested in narrow network plans, it’s that they just don't know all the facts. When employees understand that these plans typically offer the very same services as broader network plans, they often decide that these policies make sense.

Myth 3: Narrow networks are restrictive.

As their name implies, these networks are “narrow," but they're not restrictive. The big difference with these value-based plans is their emphasis on care coordination and the central role of the PCP.

When a skinny network can be a good option

Employers know they need to offer health benefits to attract and retain top employees. Narrow network plans provide a way to contain costs without sacrificing care, but because they’re comprised of local, community-based medical providers they’re best for a workforce who works at a single location and therefore lives within proximity to the job site/office.