Are You Selling More Network Than You Should?

When you fly to New York, do you buy the plane or do you buy the seat you need to get you there?

There are going to be people that say they want the plane. They should roll with that. For the rest of us, it’s a waste to pay for more seats than our butt can sit in. Even if I want to fly first class, I’m not worried about what’s happening behind me.

Paying a fair price for the doctors and hospitals we use rather than paying a premium for the ability to see similar doctors and hospitals we will probably never need, makes a lot of sense. That’s why the savvy agent isn’t afraid to introduce a limited network.

At CaliforniaChoice we include 17 networks in our private exchange portfolio. Some are full, some are a step down from full and many are narrow. I see the enrollment patterns and I study the utilization stats so let’s dispel some myths here.

First, owners don’t always buy full network PPOs.

Owner enrollments started to change when we moved to ACA and a redistribution of premium costs resulted in triple digit increases for some businesses.

Carriers responded with creatively designed limited networks. Some of these new networks included only non-preferred providers but were attached to rich benefits while others included nothing but a few preferred hospitals and physicians.

Now we see cost conscious owners and Millennials alike are buying narrow network PPOs and – yes, it’s true – HMOs.

The workforce that grew up in the days of $5 copays and unlimited access is aging out. The tech savvy, recession impacted, Groupon crowd is aging in.

We’ve seen Millennials compromise on their right to drive their own cars, on the ability to own their own homes and now on the convenience of full networks. These are people that have grown up with a thrifty mindset and access to instant information for quick comparisons. They take time to shop around and inform themselves. They even made it common to research and negotiate a car purchase via text before they ever hit the lot.

The experience of shopping is not as celebrated as it once was, the right purchase at the right price, is.

The mall generation that enjoyed instant gratification was slow to accept shipping times and cumbersome return policies from online shopping, but immediate access to deep discounts have made certain inconveniences very palatable.

This is exactly the thought process that now translates easily to the world of benefits where an informed buyer can usually access their doctors and hospitals using discounted limited networks.

I’ve had agents across the state telling me they are afraid to sell a limited network because another agent might come in with a full network. I see this as an enormous disconnect between the broker community and the end buyer.

We dropped the full network PPO from our portfolio more than a year ago but we’ve still seen the strongest retention in the history of our company and hugely successful new business strategies. That’s true even though our biggest competitors all offer full network PPOs.

I’m convinced that getting access to full network PPOs, at least in an exchange environment, just isn’t relevant if an employee can access the same providers using plans with a discounted premium.

If everyone in a group has access to where they want to go, does it matter that they each have a different colored card? Our members voted with their loyalty to our program.

Here’s another way to noodle on this. No network in existence includes every provider so what is a limited network? If your card gives you access to where you need to go, is it even relevant how many other places you could have gone? Why ask our clients to enroll based on the exception rather than the rule?

In thinking through this topic I reached out to several brokers to ask, “What’s the value of a full network PPO?” The answer was coverage. Benefit designs are just as rich on a narrow network as they are on a full network, sometimes more rich, so we’re talking about network coverage not benefit plan coverage.

Jason Reichart put it well when he explained, “A narrow network PPO is competitive in the market, especially if you’re providing a high level of service to your client.

“I was working with a woman enrolling in CalChoice that needed to keep her doctors. I ran my searches and found she could access her doctors with the CalChoice limited network PPO or the UHC SignatureValue full network or she could reach most of her doctors through the limited UHC Focus plans. After calls to the two doctors that didn’t take Focus, we had negotiated her cash pay rate and saved her $2,000 by moving her to UHC.

“The PPO worked perfectly and all of her providers were in network, she would have had the ability to use her out-of-network benefits for any provider that wasn’t in network but once she had access where she wanted to go, she just wanted the lowest price for the coverage she needed. It didn’t matter to her if it was Advantage or SignatureValue or Focus.”

So I ask, are you selling more network than you should? If you’re still leading with just full network, you likely are.

If you are working in the Orange County market you should be familiar with Grant Moulden, the Regional Sales manager for that territory. His take is this, “For every group we run disruption reports on, less than 10% truly need a full network PPO.” He counted the education of the consumer as paramount. In his words, “Gone are the days of a one size fits all health care solution.”

So try flipping the script by selling the limited network with the option to buy up to medium and full. Let the employee decide on their right fit.

In my world, we provide enrollers at no cost to the broker community to work with employers. More importantly, we offer a suite of technology that serves to bridge the gap between the employee’s need and their best fit plan.

Because each employee gets access to multiple carriers, multiple plans and multiple networks at CaliforniaChoice we give them a free employee decision support tool called the Automated Choice Profiler. It allows an individual employee to identify the right plan for that family’s specific needs, and prioritizes the available plans in an order that reflects both the networks that keep the employee’s doctors and the plans that minimize costs. We also offer a robust Provider Search with 1-click access to any combination of doctor, hospital and, if needed, physician group.

We have seen more change in the years since ACA than we saw in the centuries before it. Technology dominated in year one. Access to care is where the change is happening now.

We can keep selling America on the idea that they need to pay more to get as much access as they can, or we can stand up and be agents for change. People are looking for more answers. Use your creativity to leverage the mechanics behind this new world of limited networks. Learn about new offerings like the sure-to-be-wildly-successful regional provider contracts. GAME CHANGERS.

Always be working the new angles or else beware of the brokers that are.

Special thanks to Michael Payton, Alexandra Davis and Rebecca King for their contributions to this article.

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For prior articles on Charity, Work/Life Balance, Who's Buying Who, Ancillary Exchanges, Masterminds, Mentorship, or the Abundance Mindset, see my prior posts.