Deal provides peek at Anthem’s narrow networks

A new agreement in Wisconsin provides a glimpse of the kind of “narrow network” arrangements Indianapolis-based Anthem Blue Cross and Blue Shield might attempt in Indiana.

Anthem’s Wisconsin unit and Milwaukee-based Aurora Health Care signed their first large client for a narrow-network plan, according to the Milwaukee Journal Sentinel. Roundy’s Supermarkets Inc. will offer health insurance to its 8,000 employees that steers them to visit only Aurora’s 15 hospitals, 172 clinics and 1,500 physicians.

In exchange, Anthem and Aurora have offered Milwaukee-based Roundy’s savings of 8 percent or more off the trend in the marketplace. In September, Dr. David Lee, vice president of health care management for Anthem’s Indiana health plan, said he expected it would take savings of at least 10 percent to entice employers to embrace the narrow-network concept.

In Wisconsin, Anthem and Aurora also have agreed to take on some financial risk if they provide unneeded care or care that costs more without being more effective.

"We really feel we have a great partner to prove the model out quickly," Larry Schreiber, president of Anthem Blue Cross and Blue Shield in Wisconsin, told the Journal Sentinel.

Roundy’s employees and their family members still can get care from non-Aurora doctors and hospitals—but they will pay much more out of pocket to do so. Roundy’s families that live outside of Aurora’s service areas or who are traveling will be able to visit any hospital or doctor that is part of Anthem’s national Blue Cross network.

As part of the health plan, Aurora will have employees at some Roundy's sites at least part of the week to help employees navigate the health care system and to help manage the care of those with chronic diseases.

"That's one of the advantages of our integration and size," Steve Bablitch, an Aurora senior vice president, told the newspaper. "We can do it and we are willing to try it."

In addition to Anthem, Aurora has a similar narrow-network agreement with Connecticut-based Aetna Inc. to sell health plans tied to its network. Aurora also contracts directly with employers who self-fund their employee health plans.

In Indianapolis, all the major hospital systems are considering narrow-network offerings. Indiana University Health pitched its plan to employers a couple of years ago, but hooked Indiana University as its only client. IU Health is a joint venture of the IU School of Medicine and Methodist Hospital, but it is a separate organization from Indiana University.

More recently, St. Vincent Health, Community Health Network and six hospitals that are part of the Suburban Health Organization agreed to form a consortium that will negotiate joint narrow-network contracts, which emphasize keeping patients healthy, with health plans and employers.

Anthem’s Indiana unit says it is currently building narrow-network plans to sell to individuals in the health insurance exchanges that will begin operating a year from now. After that, Anthem Indiana plans to create similar plans for the employer market.