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What Gets Measured Gets Managed - Net Change and Total Change

Posted by Susan Donegan on Fri, Apr 28, 2017

When you subtract the number of providers who leave the network from the number who've joined for a time period, you get an important metric, Net Change. Net Change measures the overall growth in a network. Potential clients are looking for long-term relationships, and while losing providers isn’t positive, the ability to replace them efficiently is a strength.  

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In the example above, while Network A lost 8% of its providers during the time period versus only 6% for Network B, it was able to more than replace them, with adds of 14%. Network A’s net growth of 6%, compared to the competitor’s growth of just 2%, can be positioned as a clear advantage. From a management perspective, Net Change also serves well as a key performance indicator for provider relations teams.

Another important metric is Total Change, which demonstrates the amount of movement in a network or a market. While Net Change measures network growth, Total Change simply measures movement. It shows the overall change in the makeup of the network over time. Using the previous example, Network A had a total change of 22% (14% adds plus 8% drops) versus Network B’s total change of 14% (8% adds plus 6% drops.)

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Employed by itself, Total Change is not all that revealing. However, when combined with Net Change, it creates a powerful new metric for gauging the productivity of your network development activities compared to internal benchmarks and relative to your competition, which we call the Network Productivity Index.   

Download our whitepaper to better understand the dynamics of provider networks and measuring all of the productivity index components - adds, drops, net change and total change.

Tags: network growth, compare networks, health insurance, network productivity, healthcare providers

 

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