A strong provider network program is critical to a property and casualty (P&C) insurers' cost containment, benefit extension and customer retention strategies. Both in the workers' compensation and auto casualty markets, one tremendous opportunity to retain customers and maintain a competitive edge comes from the lower claims costs associated with provider bills that fall into provider networks.
Positive customer satisfaction is a requirement for retaining customers and growing a business. The claims process is one of the best opportunities for P&C carriers to provide added value to their policyholders. For auto insurance carriers, using voluntary provider networks lowers the costs associated with claim-related medical treatment and enables policyholders to receive additional, necessary, medical care since they will not reach their policy limits as quickly. This translates to customer benefit extension, which in turn can drive a better customer retention outcome.
In workers' compensation, a reduction in claims cost is achieved through accessing a preferred provider organization to receive contracted discounts beyond state fee schedules and bill review reductions. By helping injured workers get healthy in a more cost effective way, workers' compensation insurers' can clearly show their concern for their customers in a fiscally responsible manner and lower their overall claims costs in order to remain competitive within the industry.
To execute an effective provider network program, it is helpful to examine the five key pillars of a successful program. Each pillar is a fundamental component of the program and together they form a strong, supportive foundation for success.
Pillar #1: Optimization
Optimization analysis is the evaluation of a network mosaic that drives the best possible yield. Partners in provider network management likely offer a wide array of networks — specialty networks, geographically focused networks, pharmacy networks, out-of-network negotiation services and specialty bill review. The key to maximizing the value of these various types of provider networks is the ability to analyze the best combination to fit a business. The hierarchy of the networks and cost containment solutions have a tremendous impact on penetration rates, customer benefit extension, and turnaround times.
Ongoing analysis utilizing rich data sets and technology-based optimization tools are critical to maximizing overall success of a provider network program. In addition, it is beneficial to analyze workflow to ensure that it maximizes the opportunity of using a provider network program and out-of-network solutions.
Pillar #2: Single-Source Management
There exist a broad array of provider networks, a number of which have differing merits. As a P&C carrier, managing those networks individually can be challenging and ineffective from both an efficiency and cost perspective. An effective partner should provide single-source management for all partners and their respective solutions. Partners should be able to create management programs that help to analyze and optimize networks based on workflow and bill analysis; handle any provider disputes expeditiously; and provide subject matter expertise in the areas of technology, compliance, and net results. A proactive approach to managing the provider network relationship is essential to gaining better insight into the program. The provider network management program should also have a workflow analysis component, since it is the combination of business rules, technology solutions and network yield that contribute to the success of the program.
Pillar #3: Technology
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