Responding to the backlash by consumers against managed care in the mid-1990s, health plans broadened hospital and physician networks. Recently, however, plans have developed narrower networks — often called "high-performance" networks — that encourage enrollees to choose physicians who score well on efficiency and quality measures.

Interest from a limited number of large, national employers has served as a key stimulus in the development of the new networks. While other employers express interest, not all are prepared to deal with potential employee backlash.

The report finds that specialties are most often targeted for inclusion, although some multispecialty group practices have pressed plans to include all of their specialists. Hospitals usually are not included.

The criteria used to select which specialists to include focus on those who:

• Represent a large share of medical spending
• Reflect significant variation in costs and quality
• Generate sufficient claims volume to assess physician- or practice-level efficiency and quality
• Have established quality measures and/or guidelines to benchmark performance

The method used to profile physicians for inclusion in these networks usually involves some combination of costs and quality. Most plans reported that payment rates for physicians in their high-performance networks are the same as for physicians in their larger networks. However, plan executives are considering some kind of differentiated payment system in the future.

The complete issue brief is available on the HSC website through the External Link below.