The End of the Check-the-Box Era: How Benefits Leaders are Mandating Outcomes

Benefits solutions can’t just check off a box anymore. Faced with high healthcare costs, there’s no margin for error. It’s why employers today are mandating that point solutions deliver the outcomes that matter to them, not just the marketing metrics a solution might suggest.

“Billions of dollars have been invested by these benefits solutions with a lot of marketing fluff… and granted, mixed in there are some actual positive outcomes, but sussing out the good ones is really difficult,” says Meg Barron, Managing Director at Peterson Health Technology Group (PHTI).

We recently asked a room full of benefits leaders for advice on holding vendors accountable and for the metrics that matter.

The good news is that benefits leaders have more data than ever before, says Magda Rusinowski, VP at Business Group on Health. Data silos still exist, but employers have improved their ability to integrate and exchange data across vendors, which is setting up better ways to measure outcomes.

Employers are also more comfortable creating disruption, demanding more independent valuation of the results that benefits solution providers say they can achieve. Others, who can afford it, are doing more data evaluation in-house.

“If we go back 10 years, disruption wasn’t okay,” says Evelyne Giguere, SVP, Head of Client Success at Lantern. “The goal was to minimize disruption at all costs, and now healthcare costs are rising so much that disruption has become acceptable with greater parameters – as long as it’s informed and well done.”

How to Take Control of Vendor Contracts to Ensure Outcomes

So what do benefits leaders need to do to make sure they’re aligning on the right outcomes? Nathan Counts, VP of Total Rewards at Amtrak, says they need to ensure upfront alignment on data transparency before ever signing a contract.

“A quick contract that doesn’t have the right SLAs is going to be a bad outcome,” Counts says. “Be very clear about what the vendors are accountable for and determine what data they need from us (as the employer) to be successful. We’re taking the next step into deeper clinical outcome metrics – and we can rely on our partners to help us get there.”

PHTI recently released a resource on performance-based contracting to help employers align on what outcomes they want from benefits solutions. “It has pre-filled recommendations,” Barron says. “It helps you address if you’re working with the right person and raising your own bar of what the expectations should be.”

Barron and other benefits leaders say to make sure your contract states that you own your data and can share it with other business partners without restriction.

Rusinowski also recommends asking vendors in RFPs how they integrate within the broader benefits ecosystem—from the health plan to the pharmacy space and other point solutions. “The ability to integrate flexibly has to be taken into consideration,” she says.

Everything in your contract should also have a parallel question in the RFP. A salesperson may say yes, but it could get red-lined in the contract. This puts employers in a position to negotiate changes in the contract.

Barron says benefits leaders need to be in the driver’s seat to implement contracts that tie vendor payments to clinical outcomes, engagement and cost savings. “Through the interviews we’ve done, employers said, ‘I actually need to see the file format that vendors are going to give to me to make sure it’s going to work for me to be able to contextualize the data.’ And, it’s perfectly relevant for them to be asking for this.”

Claire Brockbank of 32BJ agrees: “It’s your right to include no gag clauses. It’s your right to eliminate, it’s your right to direct contract, it’s your right to include carve-outs. And that’s separate from the rates. Rates and rights are both super important, but they’re a different dialogue in contracting.”

Many benefits solutions have helped to lead the way in the past few years by being more accountable and open to sharing data. Magda says those learnings are translating to health plan and PBM relationships.

Even smaller to mid-size employers have more ability to negotiate today, Barron says. “The theme we heard through our interviews was, ‘I didn’t know I could ask for that or I had no idea other companies were getting that.’” Benefits leaders just have to be willing to bring the conversations to the table.

The Outcomes Metrics that Matter from VOI to ROI

Benefits leaders also need to ask how vendors demonstrate metrics that are important to internal stakeholders. Value on Investment (VOI) still matters as a leading indicator to show early signs of success.

“Those leading indicators are still important,” Counts says. “Even if that’s not where you’re going to tie most of your performance guarantees, they are still a very important signal whether you’re going to ever get to strong external outcomes.”

Cost, however, still must be the underlying reason you’re implementing a new benefits solution, but as Rusinowski points out: “In this environment, you can’t separate cost from value. Value encompasses quality, encompasses patient outcomes, encompasses access—all of the things that are part of the definition of value-based care.”

Ultimately, benefits leaders know finance teams demand ROI. They want to see hard-dollar savings. Companies also need to decide what the timeframe is for vendors to deliver on ROI. And that might be different depending on the solution.

“There are going to be advanced primary care programs that actually engage people who previously didn’t have a primary care physician,” Rusinowski says. “The ROI on those is going to be longer, but it’s hard to argue that it’s not needed. A patient who went to a doctor is always going to be more expensive than one who didn’t. But it’s very short-term thinking. Getting your leadership to this longer-term thinking is hard, but also important.”

Benefits leaders may not be able to solve everything in healthcare today, but by holding vendors accountable to deliver on the agreed-upon metrics that matter, they are driving real change that will help to lower healthcare costs and improve clinical outcomes.

“Checking the box is not enough,” Counts says. “We’re out of options with staring down these high costs that are leading employers to mandate good outcomes become the reality.”