Health care insurance plans and policy makers are constantly working toward improving cost management. Recently two techniques to do so have reemerged in this effort: narrow networks and reference pricing, techniques that have enjoyed success in the past. Likely the largest (de facto) user of narrow networks is the integrated health plan Kaiser and CalPERS (the California Public Employees's Retirement System) has saved millions in its use of reference pricing. What are these practices, to what extent are they successful in saving money (and improving health care quality) both for payers and patients and what are the real and/or potential downside risks associated with these practices.
During this 21-minute interview Dan Mendelson defines these two cost savings techniques, i.e., how do they work or why they are attractive to plans, do they improve health care quality both within and beyond the ACA insurance marketplaces and how or why these techniques might not be in the best interests of patients (and possibly providers as well).
Dan Mendelson is CEO of Avalere Health, a DC-based health care research and policy consulting firm. Dan leads the organization's operations and engages in strategic advisory work for major clients in life sciences, managed care and in many provider segments. Prior to founding Avalere in 2000, Dan served as Associate Director for Health at the White House Office of Management and Budget. Dan also presently serves on the board of two public companies: HMS Holdings; and, Champions Oncology. He previously served on the boards of Coventry Healthcare and Pharmerica. Dan is also on the faculty at the Wharton School of Business at the U. of Penn. He holds a BA in Economics and Viola Performance from Oberlin College and a MPP from the Harvard Kennedy School of Goverment.