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Nov
20

Two new network offerings

My quest for an actual provider-centric network is not complete. But there are a couple of companies that look to be off to a good start.
By way of background, most networks tout their huge directories of lots of providers, their discounts, and not much else. They sell their network by electronically matching their provider database against the prospect’s 1099 data (historical payments to providers). The better the match, the better their chances of landing the deal. At one level this makes perfect sense.
I’d suggest that this methodology is fatally flawed; the payer is asking the wrong question. By identifying networks that have as many docs as possible that already treat the payer’s claimants, the payer is asking for nothing other than a cheaper per-unit price. Yes, they will get a lower price per service from the docs they like, but they will also keep in the network docs they do not like at all – the ones who don’t return adjusters’ calls, don’t understand workers comp, do lots of unnecessary PT in their offices, and dispense drugs at outrageous markups.
Harbor Health takes a different approach – they have developed a process and analytical capability that enables HH and their clients to analyze sort thru their gigabytes of data to identify the providers that meet their definition of ‘good’. The analysis includes claims data as well as patient satisfaction and claims satisfaction information and billing/admin data to identify physicians who meet (customizable) criteria. HH is also building networks. To date, most of their customers have been large self insured employers (SoCal Edison was one of the first, and Sears is their latest).
After spending a half hour discussing Harbor Health’s process, methodology, ranking system, and approach, I’m impressed.
FairPay Solutions (current HSA consulting client) has built a physician-only network in Florida that is currently being evaluated by several large payers and soon to be implemented in Florida by one. FairPay also has access to a wealth of data, and has mined that data using sophisticated criteria as well as local knowledge in their development effort. The folks FPS brought in to develop the network came out of the old Choice Medical Management, acknowledged as the premier network company in the Sunshine State.
FairPay is, quite intelligently, building a physician-only network. There are any number of companies that do an excellent job of managing physical medicine, drugs, DME/HHC, imaging, and hospital costs. What FPS is focused on is the physician who controls how these other services are utilized.


One thought on “Two new network offerings”

  1. Joe -thank you for the great review. We appreciate it. I wanted to correct one thing. While we discussed the SoCal Edison network as an example, I did not mean to imply we were involved. Edison’s approach was guided by a similar focus on quality, and they showed great results. The credit belongs to Teresa Miur, though. I am sorry if I did not make that clear! In addition to Sears, we completed networks for Sedgwick CMS, Lockheed, Interplan, Disneyland, and several others.

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Joe Paduda is the principal of Health Strategy Associates

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