Network Optimization: Why Physician Quality Should Drive Your Benefits Strategy

Our Presenters
Jacob Best
Director of Network Development
Jacob and his team are responsible for driving
the relationships with Grand Rounds’
network of physicians, provider
groups & health systems.
Nate Freese
Director of Analytics
Nate is responsible for developing
Grand Rounds’ approach to rating
Physician quality, predicting patient
outcomes, and modeling the
cost-effectiveness of interventions.

Agenda
• Introduction
• Network Design Trends
• Innovative Ways Employers Are Optimizing Networks
• Wrap Up

Agenda
• Introduction
• Wrap Up

Network Design Trends Over Time
Time
NetworkCoverage
Very
Narrow
Very
Broad
1970s
HMO Era
1980s 1990s 2000s Today
PPO Era
Narrow
Networks
EPOs

38%
32%
30% Ultra-narrow
Narrow
Broad
Narrow Networks and EPOs – Employers and Carriers
Source: McKinsey Center for U.S. Health System Reform, Nov 2013. McKinsey & Company.
2014 individual exchange (N = 120).
Pct of analyzed silver networks
Network distribution on public exchange:
Public exchanges exhibit high percentage of narrow networks

Coverage Restrictions for Academic Medical Centers
35% 94%vs.
Ultra-narrow
networks
Broad
networks
Networks with Academic Medical Centers in network

Employer Value - Narrow Networks
26% savings
between
narrow
network and
broad offering

So Narrow Networks Are Here,
But What Do Employees Think?

Narrow Networks and EPOs – Consumer Perspectives
Source: Kaiser Family Foundation Health Tracking Poll, Feb 2014
Narrow and
affordable
Broad and
more expensive
Network
Choice
51%
37%
Which type of health insurance plan would you rather have?

Narrow Networks and EPOs – Consumer Perspectives
Source: Kaiser Family Foundation Health Tracking Poll, Feb 2014
Narrow and
affordable
Broad and
more expensive
Network
Choice
63%
23%
Of the 37% who chose narrow and affordable - What if you would
not be able to visit the doctors and hospitals you usually use?

The Achilles Heel of Narrow Networks
• Employees think employers are only
concerned with cost savings
• Patients don’t trust the quality of
physicians in narrowed network

Agenda
• Introduction
• Wrap Up

1. Direct to Institution
Networks
2. Customized
Networks
3. Optimized and
Augmented Networks
Innovative Solutions Addressing The Cost – Quality Issue
Significant Plan Change Moderate Plan Change No Plan Change

1.
Direct to Institutions
Boeing Approach

1. Direct to Institutions:
Boeing Approach
• It is hard multi-year investment
• Needs to actually impact care to
improve cost / outcomes
• Member communication is critical
Source: Boing Preferred Partnership ACO presentation, MBGH

2.
Customized Networks
New Alternative Payors

2. Customized Networks:
New Payers
• Strong value & outcomes
• Risk of payer and member push back
• Often look at institutional quality only
• Best suited to geographically
concentrated populations

3.
Optimized Networks
Grand Rounds Approach

Help patients and organizations achieve measurably better outcomes
Our mission at Grand Rounds
Watch a 2 minute patient
testimonial. Click here.

3. Optimized and Augmented Network:
Grand Rounds Approach
• Diagnose the Problem with Data
• Influence Physician Choice for Doctor Visits
• Augment Network through Second Opinions

Accessibility of physician level quality data has grown exponentially
Diagnose the Problem with Data
2005 2010 2015
Provider Level Data
Source: Reuters Health (Dec 2014) overviewing research
Published in JAMA Internal Medicine
Selected states disclosing surgical outcomes data
CMS, medical societies, and additional states begin
disclosing outcomes data
State APCDs and commercial data vendors begin
selling administrative claims data
Individual hospitals and group practices begin
disclosing outcomes data

Quality scores are based on vast, newly available datasets
Grand Rounds Physician Quality Algorithm
Patient
Outcomes
Training Expertise
Practice
Affiliation
Awards &
Publications the top
of doctors
10%
7 billion clinical data points analyzed with >96%
physicians evaluated

Influence Physician Choices - Average Physician Quality
In Orthopedics
Based on quality
algorithm output for
each HSA with 3+
orthopedists

Influence Physician Choices – With Physician Quality
Optimization
Based on quality
each HSA with 3+
orthopedists
Top quality physicians achieve:
• 15% lower hospital admission rates
• 20–25% lower complication rates
• 30–40% lower mortality rates
• $1800 saved per office visit case
Optimize Network By Channeling Care

Augment Network Through Second Opinions
Based on quality
each HSA with 3+
orthopedists
Remote expert opinions achieve:
• 66% change diagnosis or treatment plan
• 2x faster return to work
• 40% removal unnecessary surgeries
• $10k+ saved per case
Patient
Expert Physician
Augment Network With Expert Opinions

Grand Rounds Customers
See Real, Immediate Impact
Talent
Retention
Measurable
ROI Achieved
Meaningful
Patient Impact
World-class health
benefit for employees
20-25% lower
complication rates
$1800 saved per visit
and $10k+ per opinion

Agenda
• Introduction
• Wrap Up

Concluding Remarks
Traditional narrow networks:
• Tradeoff between cost,
coverage and quality
• Patient backlash and confusion
• Implementation pains from
switching networks
Optimized and augmented
network design:
• Reduced costs by focus on
quality
• No patient frustration
• Current network maintained

Want more practical details?
Watch the webinar recording on this
topic, including Q&A with the experts.

Network Optimization: Why Physician Quality Should Drive Your Benefits Strategy

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