Benefits leaders have the option to choose from more than 300 point solutions across 20+ health categories in an effort to reduce their health trend, which for some is rising as high as 14%. But most benefits teams have less than 10 people—even at jumbo employers—with many averaging two full-time team members. So how do you find the bandwidth to assess them to make sure your limited capacity is focused on solutions that will actually move the needle for your population?

The good news is there are credible industry groups such as Business Group on Health, Purchaser Business Group on Health and World 50 Roundtables (formerly Employer Health Innovation Roundtable) to support this process so your team doesn’t have to boil the ocean. You can also lean on your benefits consultant. “I want my consultant to look broadly at the entire ecosystem and then bring me the top three vendors in a particular category for my team to deep dive on,” said Sara Richards, Director of Benefits for Red Bull.

Claire Brockbank, Director of Policy & Strategy for 32BJ Benefit Funds, a labor union with more than 300,000 members along the East coast, has seen lots of her peers become overly dependent on their consultant. “It’s understandable—most benefits teams are understaffed and don’t have the bandwidth to go deep on all the vendor options. And the more reliant you become, the harder it is to step away,” said Brockbank who encourages benefits leaders to be as objective as possible while taking advantage of their expertise.

Peterson Health Technology Institute is focused on helping employers frame the issue of how to select and measure their point solutions. The two-year-old nonprofit, which is privately funded through a $50 million investment from The Peterson Center on Healthcare, made a big splash last year with its debut report on the digital health solutions focused on diabetes management. The highest performing vendor earned a B- and they were thrilled. “We were surprised by that,” said Caroline Pearson, PHTI Executive Director. “You assume that a multibillion dollar industry is adding material value, but that’s not what our research showed.”

The vendors were good at driving engagement, Pearson said, but when it got to the question of “are you improving diabetic outcomes?” no one could answer. For diabetics, reducing A1c levels is the north star, but when they tried to hold vendors accountable to that metric, she said it was controversial, but shouldn’t be.

7 questions to guide each vendor evaluation:

1. What problem are we trying to solve?
2. Does this solution augment or replace in-person health care?
3. What population is this solution intended for—diabetics, everyone, high-risk chronic conditions, cancer, family creation, etc.
4. What are the success metrics that make sense for evaluating the effectiveness of this solution?
5. What is a realistic timeline to see results?
6. Who is responsible for driving employee engagement?
7. What is the pricing model?

A Framework for Evaluating Point Solutions

Pierce Graham-Jones has spent his entire career evaluating health care point solutions or advocating for the ones he has conviction on. Graham-Jones started out on Obama’s HHS team, then moved to Jif which became Castlight (now apree health) and today serves as the Chief Product & Strategy Officer for Marathon Health, an advanced primary care solution for employers. “Castlight had more than 40 vendors in the partner portfolio, so we needed an extensible framework that could help us evaluate very different solutions across multiple categories,” he explained. “At a high level, these four buckets were very effective at helping us frame our evaluations: engagement, behavior changes, leading outcomes and lagging outcomes.”

Engagement is a big component and the first gate to get past in your vendor discussions. The partner should have accountability for driving engagement but as the employer, you’ll have to support it. A few tips on driving the conversation:

• Ask the vendor to walk you through their engagement playbook and ask to see the data across the cohorts that most closely resemble your own population.
• If your people are onsite in a manufacturing facility, don’t compare their case study for how they engaged a software company full of people that sit in front of computers all day, for example.
• How does engagement grow over time? Some solutions are relevant to your entire population—mental health, primary care, EAPs—and others target a specific group, such as diabetics, cancer patients and those preparing for surgery.

When it comes to seeing behavior changes, acknowledge that this is really hard and if the vendor suggests otherwise, that’s a red flag. Behavior change takes time, but to truly bend the cost curve and see better health outcomes, it’s required. The CDC says 90% of our nation’s $4.5 trillion health spend stems from chronic and mental health conditions, the majority of which can be influenced by lifestyle changes, such as getting more sleep, quitting smoking, reducing alcohol intake and eating healthier. Simple changes, but not easy.

Some solutions can show leading indicators in 18 months while lagging indicators take much longer. Every category is different, such as MSK versus mental health. Another good example is primary care—A1c reduction in your diabetic population is a lagging indicator that will take time to move, but a leading indicator that they’re on the right track is number of PCP visits and medication adherence.

When it comes to establishing and monitoring those leading and lagging indicators, you have to make sure you can get the data.

“As a purchaser, getting the data is critical—engagement, clinical, claims, etc. We model all of our own data and document the success metrics before we launch. We figure out what we can expect at 6, 12, 18 months and look for milestones to give us a green light to keep going,” said 32BJ’s Brockbank.

Very early in the sales process is the best time to get data sharing commitments from the vendor. “I can do the analysis later, but I want a contracted commitment from the vendor that they’ll share it with us. It’s a gate in our decision process in order to move forward,” Brockbank said.

And if the vendor pushes back on the data ask, think very hard about whether you should continue the conversation. “If they say they can’t share data, it’s typically because they don’t have it or the results aren’t pretty. Either way, it should be a red flag for purchasers,” said Dickon Waterfield, President of Lantern.

How to Hold Benefit Solution Vendors Accountable

PHTI surveyed 300 purchasers across the country and 100% of employers said they plan to use performance guarantees (PGs) in their vendor contracts moving forward. The majority of benefits leaders at Lantern’s Ignite Summit are already using PGs with most of their partners.

Despite widespread use, it’s not easy to get alignment on the PGs. “Getting them in place is a nightmare because everyone defines and calculates the metrics differently,” said Lesley Leiserson, Sr. Director, Benefits & Health Management for The Home Depot.

As a starting point, go back to the 4-pronged framework of engagement, behavior change and leading and lagging outcomes you want to drive. Tie the PGs to those and be as specific as possible.

If a vendor tells you they can deliver 30 to 40% engagement you should do a pay per engaged pricing arrangement instead of a PEPM on the whole population, suggested Graham-Jones.

Pricing is one thing; ROI is another. Every employer at Ignite agreed they need to show ROI, but defining what that means is a mixed bag. “There’s not a universal standard, unfortunately,” said BGH CEO Ellen Kelsay. “You have to define it differently based on the category of solution you’re implementing.”

In the most simplistic terms, a solution that will replace in-person care should deliver ROI on par with the care it’s replacing. If it’s going to augment in-person care, it has to show incremental ROI.

One thing everyone did agree on, however, is that ROI does not only equate to dollars. “It’s way more than just a financial calculation,” said Melinda Morimoto, Principal Benefits Manager at Genentech. Brockbank encourages purchasers to consider the full spectrum of areas you’re trying to impact. Did the solution help you attract more high-quality applicants? Did it increase your employee retention or satisfaction?

“Not all evidence is created equal. Do the upfront work to define what success looks like and how you’re going to measure it,” advised Meg Barron, Managing Director of Engagement & Outreach at PHTI. “No one wants to look dumb for choosing a solution that doesn’t work, but admitting defeat early is better than delaying the decision. Cut your losses and move on.”

Other Considerations for Benefits Leaders Choosing New Point Solutions

If you’ve got a consultant helping you with vendor selection, find out how they’re attached to the different companies. Are they compensated in exchange for recommending the solution? What, if any, business ties do they have to the vendor?

“If our consultant is compensated by the vendor we select, we let them keep the money but make them apply it in the form of a credit for my team to leverage on future projects for us,” said John Puccio, Total Rewards COE—Benefits Strategy at Ferguson.

Ryan McCracken at Edward Jones admits his team relies heavily on data warehouse partners and consultants for data science and analysis. “My team simply doesn’t have the resources to do that work,” he said.

Successful point solutions understand the care gaps in traditional medicine and know how to bridge them with digital tools, a better user experience and or different business models. An example includes Lantern direct contracting with top surgeons around the country and pushing more patients to utilize Ambulatory Surgery Centers when clinically approved instead of expensive hospital systems.

Because PHTI is privately funded, Pearson said the Institute can change the status quo because they don’t have any skin in the game. Their mental health vendor report is coming up later this year, and by end of 2025, her team will share a checklist publicly to help employers ask the right questions in their evaluations.

“Let’s raise the bar for the industry of what’s working and what’s not and why. That’s how we’ll see continuous improvement of solutions that can really move the needle on health outcomes and impact on spend,” said PHTI’s Barron.