This week is National Healthcare Supply Chain Week. Do you have transparency to your true Benefits costs?

Times are changing and Supply Chain and Human Resources are starting to collaborate more and more as it relates to Benefits being the third largest expense area within a company. For years Human Resources has managed this space, and rightly so, as they have the experience dealing with plan designs, providers and broker relationships. The challenge that human resources has been dealing with is in how often information changes as it is near impossible to be an expert in this space when you are only looking at a few contracts every year. The additional challenge is when companies rely on consulting firms that are tied to the industry to advise them on what is the best solution for their organization. While firms in this space such as Mckinsey, Deloitte, Mercer and others are great organizations the challange is related to how they are compensated and if there are any conflicts of interest.

Transparency in key in evaluating this space. But how do you know if you have transparency? A companies relationship with their benefits provider and broker is usually a long standing relationship. It is up to you to uncover the areas as it relates to what is the "TRUE COST" that an employer pays the providers and broker for each employee. But how do you do this?

What you need to conduct is a transparent analysis without bias, independent from the insurance industry. The intent is to optimize plan performance without shifting costs to employees while completing a comprehensive analysis of all expenditures related to a company’s Health and Welfare Plans. These include but are not limited to medical, Rx, dental, disability, life, AD&D, broker/consultant services, vision, benefits, administration, wellness and voluntary plans. When you properly analyze these areas you can expect to realize a cost improvement of $1,000 cost per employee per year.

 When you complete this diagnostic you will also need to examine each plan component within the program. These plan components include:

Financial Elements

• Claims
• Premiums
• Fees
• All forms of compensation (direct and indirect) 

Structural Elements

• Network
• Plan administration
• Utilization control programs
• Contract terms and conditions
• Vendor analysis
• Unnecessary and/or duplicative services
• Funding arrangements
• Plan audits

 The KEY is to target opportunities to improve performance and save money within the existing vendor arrangements, along with new market approaches/tactics. Human Resources agrees with this approach as if you can keep your current relationships and improve your program to employees while reducing cost to your organization why wouldn't you take this approach?

If you are interested in learning more about this innovative independent approach we can provide case studies and testimonials for clients where we have provided how this approach can work for your organization. Included in our analysis is an opportunity matrix identifying immediate savings opportunities, along with mid- and long-term considerations. Why we are different from other firms is that we are not compensated from the industry and we will work to set priorities and build a strategy to capture the identified cost savings and we also implement our strategies for you!

Our approach can also be more targeted if there is a desire to explore specific plan elements for improved performance. The timing for plan improvement can be impacted based on contract terms, plan year considerations and opportunities that lend themselves to immediate implementation. After the receipt of necessary information our process normally takes between three and four weeks.

Gain control of your true costs by gaining a true understanding of your plan design!

If you are interested in learning more about this transparent approach reach out to me as we will be happy to help you review your program through an independent lens. I can be reached at [email protected]