Multi-Location Retailer Identifies $800K in Network Leakage

The Challenge

This national retailer with locations across 12 states struggled with inconsistent healthcare costs between regions. Some markets were performing well below budget while others consistently exceeded projections, with no clear explanation from their current consultant.

Our Approach

Med-Vision performed a geo-access network analysis, mapping employee locations against provider networks, utilization patterns, and cost variations. We analyzed out-of-network utilization by service category and geography to pinpoint where leakage was occurring and why.

Key Findings

• 18% of high-cost claims were going out-of-network
• Three markets had inadequate in-network specialist coverage
• Employee awareness of in-network options was critically low in 5 regions
• Reference-based pricing could save 28% on facility fees in two markets

What Network Leakage Costs Employers

Network leakage, the use of out-of-network healthcare providers, represents a significant and often preventable financial drain on self-funded plans. When employees receive care outside their designated network, employers face several cost multipliers. First, out-of-network providers are not bound by negotiated discount rates, so billed charges are typically much higher than the rates available in-network. Second, balance billing becomes a risk, where providers can bill the patient for the difference between their charge and the plan's allowed amount, creating member dissatisfaction and potential cost-shifting back to the plan through appeals or exceptions. Third, leakage erodes the value of the network contract itself, wasting the discounts and predictable pricing that form the foundation of cost management. Beyond direct costs, it complicates claims administration and obscures true cost drivers, making strategic planning difficult.

How Geo-Access Analysis Works

Geo-access analysis is a foundational methodology for translating raw claims data into actionable spatial intelligence. It begins by geocoding employee residence or worksite zip codes and overlaying them with the locations of in-network providers across all specialties. The analysis then applies drive-time or distance standards, for example shorter expected drive times for primary care and longer thresholds for specialty care, to objectively measure network adequacy. By comparing actual member utilization patterns against this geographic map, clear gaps emerge: areas where employees are traveling excessively for in-network care or, conversely, where high out-of-network use correlates with a simple lack of nearby in-network options. This process moves beyond statewide or county-level averages to identify hyper-local deficiencies, enabling targeted interventions rather than blanket network changes. It also highlights regions where sufficient providers exist but are underutilized due to awareness gaps.

Steering Strategies That Work

Effective steering requires a multi-faceted approach that addresses both provider availability and member behavior. Successful strategies often include: targeted education campaigns that use clear, region-specific messaging to inform employees about high-quality in-network options near them; strategic network design that selectively adds providers in identified adequacy gaps or renegotiates terms with existing ones to improve value; reference-based pricing (RBP) for facility-based services, which sets a fair payment benchmark and encourages members to choose cost-effective facilities; and curated centers of excellence programs for high-cost, complex care that direct volume to high-quality, cost-contracted providers. The goal is to create seamless pathways to appropriate, in-network care through a combination of plan design, communication, and vendor partnership, thereby reducing friction for employees while maximizing plan savings.

Results

Targeted employee education campaigns, network adequacy improvements in underserved markets, and a reference-based pricing pilot reduced out-of-network leakage by 60% within two quarters. The retailer identified $800K in annualized savings with minimal disruption to employee access.