Oscar’s Narrow Network Strategy: Will it Work?

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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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