Episode 89: Rick Abbott on lowering costs by focusing on quality

Listening In (With Permission): Conversations About Today's Pressing Health Care Topics

Suzanne Delbanco chats with Rick Abbott, VP of Product and Market Solutions at Premera Blue Cross. Premera Blue Cross is a health plan in the Pacific Northwest, serving about 2.2 million members with customers ranging from large tech companies to family-owned grocery stores. Suzanne and Rick discuss if narrow networks, also known as high-performance networks, represent a viable way to lower prices in the employer-sponsored health insurance market. Historically, employers have demanded broad access PPO networks that include the vast majority of providers and hospitals in their region. This trend has somewhat impeded health plans from using their volume to negotiate steeper discounts from providers. Rick describes how creating narrow networks based on provider quality provides a real opportunity to lower costs by both reducing wasteful spending on unnecessary or harmful care and by negotiating discounts from higher-quality providers in exchange for higher volumes of patients. Suzanne and Rick also discuss the opportunities and obstacles for employers interested in pursuing alternatives to the incumbent health plans, like alternative third party administrators or group purchasing initiatives. Rick points to Premera’s 85-year history as an important value-add for customers, allowing the health plan to implement strategic initiatives at scale. For instance, Premera Blue Cross recently launched a “virtual-first” health plan that allows members to designate a virtual network of providers as their primary care providers.