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New Analysis Finds Tiered and Narrow Insurance Network Products Are Increasing in US Health Insurance Markets

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Network design is playing a central role in health benefit design and health policy debates. The goals of enhancing clinical quality and improving the patient experience, while lowering the total cost of care, are increasingly at the forefront of these discussions. Our latest research finds that tiered and narrow network insurance designs are becoming more prevalent, particularly, in the exchange market.

Horizon Blue Cross Blue Shield of New Jersey asked Avalere to examine the available data on the prevalence of tiered and narrow network designs. We analyzed evidence of their effectiveness in improving care while holding down costs, factors driving their growth, potential challenges associated with these networks, and their possible roles in the increasingly value-driven U.S. healthcare ecosystem. Here is what we found:

    Tiered and narrow networks are related but distinct and both models can be created based on provider performance.
    Evidence indicates that both tiered and narrow networks are becoming more prevalent.
    National and regional health insurers offer tiered and narrow networks.
    Initial evidence demonstrating the cost-effectiveness of tiered and narrow networks is promising.
    Market and regulatory forces are driving development of these network designs.
    Access to care, transparency, and alignment of requirements in these network designs as well as uncompensated care exposure for out-of-network providers demand attention of plans and providers.

Our initial research on tiered and narrow networks suggests promise in reducing costs. However, additional experimentation and publicly available research is needed to examine the impact on quality and clinical outcomes of patients enrolled in tiered and narrow insurance networks.

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