What We Know and Do Not Know About Tiered Provider Networks

Some health care plans in the United States have adopted tiered provider networks (TPNS) to address the escalation of costs and poor quality care in the health care system. TPNs provide financial incentives for members to use the services of those providers identified as high performers in terms of both cost efficiency and quality of care. In this article, the researchers present findings about TPNs developed from a national survey of health plans and from interviews with health plan executives, their employer clients and providers in the networks.

The study found that many health care organizations are unwilling to use financial incentives to encourage members to choose high quality and low-cost providers. There are more TPNs that continue to allow employees the freedom to choose any provider than there are TPNs that limit their choices at the time of enrollment. The researchers discovered scant evidence to suggest that TPNs help control health care costs or that TPNs have a positive impact on quality of care. The methods used by plans to identify high performers varied, which appeared to exacerbate customer confusion, added to the communication challenges faced by the health care plans and providers, and contributed to provider skepticism and resistance to adopting TPNs. The authors conclude that there are many unanswered questions regarding TPNs, and it is not yet clear whether they will be successful in reducing health care costs or improving quality of care.