Peter Schultz
Vice President, Actuarial & Underwriting Services
When employers look to control rising health plan costs, they typically focus on utilization management or wellness programs. But there's another important factor often overlooked: how care is accessed in the network itself.
The network your plan uses determines where your employees get care, which negotiated rates apply, and ultimately how much you pay. Small price differences per visit can add up quickly across a workforce — but with the right data, you can turn that challenge into purchasing power.
The hidden impact of network design
Think of your network as a routing system. It defines which providers are available and influences where employees seek care and what they pay for it.
For example, two hospitals in the same city may offer identical procedures, but one might charge facility fees that are 40% higher than the other. A specialist visit at one practice versus another could mean a $200 difference per appointment. When you multiply these gaps across your entire employee population, the impact can be substantial.
This issue is compounded because a handful of high-cost services — inpatient stays, surgeries, advanced imaging — often account for the majority of your total spend. Even minor pricing differences for these services can significantly affect your plan costs.
Why small gaps add up fast
Routine care drives volume. Outpatient procedures, imaging, therapy visits — these are the services your employees use regularly. When each event carries even a modest price premium, those gaps compound across thousands of visits.
For self-funded employers, these per-visit differences may add up to six- or seven-figure swings over a single year. That's why network construction — who's in, who's out, and what they charge — is one of the most important cost management tools available.
What traditional approaches miss
Most employers evaluate networks using market averages or carrier-provided summaries. These approaches smooth over the variation that matters most. They can hide high-cost outliers and obscure the provider-level price differences that drive your actual spend.
Without provider-specific rate visibility, you're essentially negotiating in the dark. You might accept higher premiums or miss significant savings opportunities simply because you can't see where the costs really are.
Three hidden factors make this even more complex:
- Negotiated rates vary dramatically. Carriers often have substantial discounts with some health systems and weak or no discounts with others — even within the same network.
- Referral patterns steer spending. Where primary care physicians send patients matters enormously, but these patterns are rarely visible during plan evaluation.
- Network breadth cuts both ways. A broad network that includes high-priced providers increases claims costs. But a narrow network that excludes high-value providers can push members to more expensive out-of-network care.
The transparency opportunity
Under recent federal transparency rules, including the Transparency in Coverage requirements and Hospital Price Transparency regulations, payers and hospitals must publish machine-readable files containing negotiated rates and pricing details.
For the first time, you can see at scale what providers and networks actually cost. The challenge is that raw data files don't equal actionable insights. To turn transparency into purchasing power, you need tools that clean, normalize, and model the data so you can make more confident decisions.
Network Navigator: From data to decisions
Network Navigator is a new proprietary tool by Marsh McLennan Agency that converts price transparency disclosures into clear, actionable insights. It ingests published negotiated rates, normalizes the data, and applies actuarial models to help you make clearer comparisons across networks.
With Network Navigator, you can:
- Run side-by-side network comparisons by location, specialty, and service type
- Benchmark the expected total cost of care by network and model realistic scenarios
- Identify where costs are concentrated and which providers drive the most spend
- Quantify the savings potential of steering to high-value providers or redesigning your network
What this looks like in practice
Two hospitals in the same city treat the same procedures, but Hospital A's negotiated facility fees are significantly lower for high-cost services.
With Network Navigator, you can estimate that difference across your employee population, model shifting a percentage of elective procedures to the lower-cost site, and project potential savings — all before you negotiate or redesign your plan.
This isn't theoretical. It's provider-specific data that shows you where your money goes and where realistic savings may be.
How to take action
Start with your claims data to understand current utilization patterns. Then use health plan transparency data to move from market averages to provider-level insights. Focus on the handful of high-cost services and the providers who handle them. Finally, communicate, use plan design, and care navigation to align employees with your strategic benefit goals.
The network you choose is often a major factor in your benefits cost. Now you have tools to make that choice and make it a strategic one.
Book a demo of Network Navigator to see a customized network comparison for your locations and get a clearer view of where your savings opportunities may lie.
