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Oscar’s Narrow Network Strategy: Will it Work?
Writing in Vox, Sarah Kliff describes VC-backed health plan Oscar’s latest twist on strategy:
Oscar’s hope is that it can take narrow networks to the next level; rather than simply cutting costs, Oscar wants to use a narrow network to improve patient experience by deeply integrating with the hospitals and doctors it works with.
Is this the right strategic approach for Oscar? It depends.
There’s been a lot of conversation about narrow networks in the past few years. 90% of the focus has been on the term “narrow”. The real bang-for-the-buck will come when we put 90% of the focus on the term “network”.
The focus on “narrow” networks has been, well, too narrow. “Narrowness” is simply one element of network design.
I believe that Oscar is heading in the right general direction with this new strategy. However, there are two broad ways to interpret Oscar’s new focus. Think of these as a continuum of options, with a lot of room in the middle between #1 and #2:
1) NARROW network as beating up on care providers for the lowest possible price
2) Narrow NETWORK as optimizing:
- Care management and coordination
- Care provider quality
- Interoperable IT and workflow among care providers in the network
- Provider network adequacy (e.g., geographic access, appointment availability, digital health capabilities such as virtual visit, etc.)
- Health plan benefit design (e.g., deductibles, co-payments, tiering, etc.)
- Price
You might guess that my advice to Oscar would be to put 90% of their efforts into #2.
Updated July 28, 4:28 pm
Oscar responds:
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