High-Value Narrow Networks and Patient Safety Organizations the Future of Cancer Care

August 2015, Vol 6, No 7

Washington, DC—Emerging trends in oncology care management include economic transparency, high-value narrow networks (now also referred to as “power networks”), patient–provider profile matching, and an evolving role for risk management. Narrow networks have been shown to lower overall costs and premiums, reduce care variation, and increase patient outcomes and satisfaction, said Grant D. Lawless, RPh, MD, Associate Professor, Clinical Pharmacy and Economics, University of Southern California, Los Angeles, at the Fifth Annual Conference of the Association for Value-Based Cancer Care.

In addition, the number of patient safety organizations (PSOs) is growing, partly as a result of a requirement contained in the 2010 Affordable Care Act, said Jeffrey Lombardo, PharmD, BCOP, Patient Safety Officer, Patient Safety Organization, University of Buffalo School of Pharmacy, NY.

High-Value Narrow Networks

Narrow networks are health plans that cover only a small percentage (30%-70%) of providers and hospitals in a geographic area and use a standardized approach to care, whereas broad networks cover ?70% of providers and hospitals in an area, and involve a considerable variation in care delivery and outcomes.

Patient–provider profile matching refers to the types of physicians and medical practices that patients in a given network want, said Dr Lawless. For example, a large number of academic physicians may not be a good fit in a community-based population of patients. Although the extra cost of “high-intensity” physicians may not improve patient outcomes, the more costly option may better match with patient desires and satisfaction, Dr Lawless said.

“There’s a building voice around having a federal standard for state exchanges and other kinds of narrow networks, to make sure that those exchanges are not totally based on the low-cost doctor, if that low-cost doctor isn’t providing the kind of patient services that patients want,” he said.

“The narrow networks have gone from being narrow networks to high-value networks,” Dr Lawless said. The idea of the narrow network is that “if we can have more standardization, we can take care of outliers, we can have everyone following a standardized process, with the ability to opt out…we can actually get rid of variance” in the delivery of care; it has also been seen that members are willing to “pay a higher premium and have more confidence and comfort in a less variable care.”

Narrow networks support high-performing providers by the use of standardization and clinical pathways, resulting in high-value networks more than broad networks, Dr Lawless said. These narrow networks have been shown to lower overall costs and premiums, reduce care variation, and increase patient outcomes and satisfaction (Figure).


In the narrow networks, oncologists are advised to use clinical pathways, prioritize clinical outcomes in negotiations with payers, and join in local, regional, or national oncology advocacy efforts.

Standardization and clinical pathways offer oncologists protection against risk, as does focusing on quality and outcomes rather than on cost-savings. Oncologists can demand having a voice on pathways, formularies, and protocols to help them prioritize clinical care and improve outcomes.

Innovative risk-sharing is another feature of high-value networks and the “pay-for-value” world, according to Dr Lawless. The definition of risk is evolving to include a risk-adjusted outcome goal.

“You can’t bring in the average cancer patient and think that you’re going to have an average risk, because we all know there’s no such thing as an average cancer patient,” Dr Lawless said. On average, patients with cancer stay longer in a health plan than members without cancer.

Risk in healthcare is based on variables such as patient history, age, as well as treatment history and treatment failures. Taking on risk by providers requires full disclosure, he believes, because oncologists often are not aware of the level of risk they are being asked to accept. Dr Lawless ­talked of a risk corridor, or “learn while moving,” in which plans and providers can engage in risk-sharing agreements initially, until providers better understand what risk entails.

Patient Safety Organizations: Improving Patient Safety and Care Quality

Dr Lombardo introduced the concept of PSOs, which are organizations that are mandated by the Patient Safety Rule to conduct activities that improve patient safety and healthcare quality.

“If we look at the landscape, there are big players, and there are very small ones,” said Dr Lombardo. PSOs can have a clinical specialty focus, and may also choose more than one type of specialty.

The Patient Safety and Quality Improvement Act of 2005 was enacted in response to a growing concern about patient safety in the United States and to the Institute of Medicine’s 1999 report, “To Err Is Human: Building a Safer Health System.”

“The goal of the act is to improve patient safety by encouraging voluntary and confidential reporting of events that adversely affect patients,” Dr Lombardo said.

The act calls for the establishment of a network of patient safety databases to provide an interactive, evidence-based management resource for providers, PSOs, and other entities. It will be used to analyze national and regional data, including trends and patterns of patient safety–related events.

By conferring privilege and confidentiality protections on providers who work with federally listed PSOs, the 2015 act is intended to promote shared learning to enhance quality of care and patient safety nationally.

The PSO program was instituted in 2013 and is growing (Table 1). In 2015, as many as 85 PSOs are listed in 30 states and in Washington, DC. “This is an unfunded program, so if you don’t have a good business model behind you, you’re probably not going to do well,” said Dr Lombardo. Indeed, between 2013 and 2015, 59 PSOs have delisted out of the program.

Table 1

Overall, 27 PSOs have agreements for the transfer of data to the Agency ­­for Healthcare Research and Quality (AHRQ), and 44 collect quality and/or safety reports that include at least 1 safety event category.

A total of 25 of the PSOs collect data, including data elements for hospitals and nursing homes on which the AHRQ eventually wants to report. Only 8 PSOs submit data to the Patient Safety Organization Privacy Protection Center, and only 6 PSOs are currently submitting test data.

The core areas of patient safety events include blood, device, fall, medication, perinatal, pressure ulcer, surgery/anesthesia, venous thromboembolism, and other.

According to the 2014 PSO profile responses, PSOs collected more than 2 million quality and/or safety reports from the contracted providers, which include specialty and general hospitals, specialized treatment facilities, as well as home care, ambulatory surgery centers, and retail pharmacies, among others (Table 2).

Table 2

The Patient Safety Organization Privacy Protection Center has received reports on 139,524 patient safety events. Of these events, 50% were submitted in the “other” category.

The Affordable Care Act currently requires hospitals with >50 beds to partner with PSOs to prevent patient harm.

A 17% reduction in hospital-acquired conditions has been realized across all measures from 2010 to 2013, said Dr Lombardo, resulting in 50,000 lives saved, the avoidance of 1.3 million patient harms, and $12 billion in savings.

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