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Narrow Network Alignment Could Drive Value-Based Payment Reform

Payers may drive value-based payment reform by aligning high-performance narrow networks, creating new payment incentives, and leveraging digital innovation.

Narrow networks and innovative solutions can drive value-based payment reform

Source: Thinkstock

By Thomas Beaton

- Investment in high-performance narrow networks, creating new payment incentives, and leveraging digital innovation could help to increase adoption of value-based payment reform across the healthcare industry, say experts in a New England Journal of Medicine commentary.

Paul B. Ginsburg, the Leonard D. Schaeffer Chair in Health Policy Studies at the Brookings Institution, and Hoangmai Pham, MD, Vice President of Provider Alignment Solutions at Anthem, assert that value-based payment adoption has been uneven, and payers should consider new ways to address inconsistent outcomes while closing gaps in quality.

“In determining what comes next, we believe it’s important to extrapolate from the lessons of these experiences to guiding principles for designing new approaches,” said Ginsburg and Pham. “It’s also essential to recognize that to truly redesign a system, one has to take a holistic approach and move multiple levers in concert, rather than fiddling with individual factors serially and hoping for a coordinated effect.”

Ginsburg and Pham suggested that payers identify their highest performing providers and assist those providers to form narrow and high-quality network.

Payers can create narrow or tiered networks of high-quality providers that earn higher financial incentives for delivering high-quality care. Narrow networks may encourage other provider organizations to increase quality and lower costs.

“Smartly allocating resources and attention to high-performing providers, combined with exerting consistent pressure on fee-for-service prices and regulations, could induce greater competition and motivate lower-performing providers to focus and improve,” the experts explained.

Payers may also want to consider building digital engagement tools to help patients use narrow networks as efficiently as possible. The experts said that digital engagement platforms would allow patients to access care quickly and conveniently within a narrow network.

Payers can promote value-based payment adoption by designing financial incentives that reward providers based on regional performance benchmarks, Ginsburg and Pham said.

Regional performance benchmarks could provide guidance for lower-quality providers seeking to increase performance, and reduce financial penalties for providers that already earn high performance scores.

The experts argued that primary care providers (PCPs) are held to greater accountability than specialists in value-based payment arrangements, which limits the potential of value-based payment adoption. Ginsburg and Pham suggested that payers should increase engagement between specialists and PCPs through bundled payments, digital consult reimbursements, and additional incentive structures for engagement.

PCPs and specialists collaboration could increase care quality within value-based provider organizations. Aligning incentives for PCPs and specialists could catalyze engagement between both groups.

“Though specialists account for roughly similar percentages of ACO providers and of the general physician population, most ACOs seem not to engage their specialists nearly as deeply as they do their PCPs in population health management,” Ginsburg and Pham said. “If payers more assertively and directly engaged specialists in such VBP arrangements as bundled payments or new reimbursements for desirable services such as e-consults, they would have incentives to collaborate with PCPs.”

The experts concluded that payers still face many operational challenges that impede widespread value-based payment adoption. These challenges include building comprehensive data-sharing, patient attribution, and technical assistance for providers.

However, Ginsburg and Pham said that the most critical aspect of value-based payment reform is for payers to collectively align their payment models.

“If payers align with one another and pursue a range of complementary solutions simultaneously, they may be able to avoid many more years of ambiguous results — and the disengagement of providers and purchasers that invested in VBP in good faith but cannot justify continued commitment if all key stakeholders don’t make critical trade-offs to build a holistic solution,” the experts said. 


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