Narrow Networks: What Your Employees Should Understand

Jul 11, 2021

Narrow provider networks are becoming a common part of employer-sponsored medical plans. For many organizations, these networks are the best option for controlling medical costs. That’s because narrow networks limit you to a select group of physicians, specialists, and hospitals. In return, you pay less for services—that’s true for employees and generally true for employers, too.

While cost-containment may be one of your organization’s leading drivers—given that medical benefits are a significant part of today’s expenditures—be aware that employees may view these networks differently.

It’s important to educate your workforce on how narrow networks work and the pros and cons they’ll need to consider. And the more upfront you are, the better. This allows employees to make their own informed decisions.

Cost is Not Everything

Given the high cost of healthcare, it would be easy to think that lower costs incentivize employees to use narrow networks. But that’s not true for everyone. While cost is an important driver, it is only one factor considered by those seeking care—and for many, it’s not the top consideration.

Westcomm helped a major Midwest employer conduct focus groups with their employees to gauge perception, interest, and understanding of their new narrow network. To their surprise, they learned cost was not as high on the list as they thought when employees were deciding where to seek care. Focus group participants put cost in the middle of the list, ranking considerations as follows:

  1. Provider qualifications: Reputation/referral, certifications, quality rankings
  2. Relationship: Comfort with and trust in provider; established health history
  3. In-network: Benefit of lower cost
  4. Location: Convenience and accessibility
  5. Care coordination: Ease of records all being within the same system
  6. Administrative ease: Stay with a provider because changing is cumbersome and inconvenient

This feedback is further supported by a Zocdoc survey that found that when searching for a provider, people care about:

  • Provider education
  • Communication
  • Trustworthiness
  • Location
  • Congeniality
  • Three Things to Consider

Three Things to Consider

If you’re introducing or encouraging the use of a narrow provider network, avoid these three missteps as you talk about it with employees:

  1. Don’t make it all about cost; do highlight other advantages. Cost is in the mix of considerations, but it may not be the top priority for everyone. Highlight the other advantages of narrow networks, like coordinated care, convenient access, and no need for referrals. You may find these are equally important and will help employees feel like you’re not solely focused on cost.
  2. Don’t avoid talking about the cons; do present the whole picture. This means being upfront about what they may not like—for example, fewer providers or less convenient locations. Employees will figure out the cons anyway, so if you’re upfront about them, they’ll respect that and possibly give the network more consideration because you’re not trying to hide anything.
  3. Don’t send the same message to everyone; do segment your employee populations by what they care about most. Segment groups and send targeted messages to those who may be more interested in lower costs. The focus groups for the large Midwest employer found that the narrow network is more likely to be utilized by younger employees who don’t have as many health issues yet—and, as a result, don’t have established relationships with providers that they are unwilling to give up. And because younger employees are in the early stages of their careers, they may have tighter budgets and be more concerned about cost. Targeting messages to a certain age or demographic group may help move the needle more than disseminating the same message to everyone.

Make Quality Care Paramount

In the end, ensure you help employees understand that your plan still offers the same quality services they are accustomed to. For example, although employees may have fewer physicians and location options, the network only chooses the best of the best. High-quality healthcare is the bottom line—while the narrow network is a way to contain costs, no sacrifices in care are needed.

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Narrow Networks: What Your Employees Should Understand


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