How do self-funded employers build provider networks?

What "self-funded" means

A self-funded employer pays for its employees' healthcare claims directly, rather than paying a fixed premium to an insurance carrier that assumes the risk. Self-funded employers typically use a third-party administrator (TPA) to process claims, and often carry stop-loss insurance to cap catastrophic risk. Because the employer is paying claims directly, it has both the incentive and — increasingly — the tools to control what those claims actually cost.

Why employers build their own networks

A carrier's network is built for a broad market, not for any one employer's population. It may include far more providers than an employer's workforce will ever use, or too few in the specialties that matter most to that specific group. Building a custom network lets an employer match coverage to its actual population instead of paying for breadth it doesn't need.

The steps, in practice

Assess the population. Where do employees live? What specialties and facility types see the most utilization today?

Browse available providers. Review published rates and terms from providers already participating in the platform.

Select and configure the network. Choose providers by specialty, geography, and rate, and confirm the network meets basic adequacy standards for the population.

Launch and monitor. Issue member access, route claims through the new network, and review utilization and spend on an ongoing basis — adjusting the network as needs change.

What to weigh when choosing providers

Geographic coverage relative to where employees actually live, specialty mix relative to the population's likely needs, and rate competitiveness all matter — but so does making sure the network is adequate under applicable network-adequacy standards, not just cost-optimized.

How OpenNetworks helps

OpenNetworks gives purchasers visibility into provider rates and terms before committing to a network shape, and keeps claims processing and repricing running automatically once the network is live — so building a custom network doesn't mean building custom infrastructure.