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Unifying benefits programs can prevent employers from wasting resources

Disparate programs can waste resources through overlaps

Unifying benefits programs can prevent employers from wasting resources

Employers must take charge to realize an optimal return on investment from the wide array of employee health, absence management and disability programs they fund, according to a prominent benefits manager.

Otherwise, employees seeking help from the companies providing them with group health plans, pharmacy services, disease management, employee assistance programs, disability coverage, workers compensation benefits, and many other employer-sponsored health and productivity programs face uncoordinated, fragmented care that can fail to detect or treat their health problems.

In such a scenario, not only do employees suffer a negative experience, but the return on investment employers obtain from the programs they pay for diminishes, said Chris McSwain, vice president of U.S. benefits at Wal-Mart Stores Inc.

“Employers invest incredible amounts of money in paying their suppliers only to find out the suppliers have overlap,” said Mr. McSwain, who also is board chairman of the San Francisco-based Integrated Benefits Institute.

But an effective supplier-management strategy that analyzes the supply chain of services that employers contract for can help deliver better care to employees, increase their engagement and help employers by removing wasteful duplications in services, Mr. McSwain said.

Overlaps occur, for example, when an employer pays for an employee assistance program, lifestyle management, disease management and perhaps a pharmacy benefit management service, all of which may provide help for an employee suffering from depression. Yet neither the employer nor those various service providers may know which supplier the employee should work most directly with to get the best help for their particular situation, Mr. McSwain added.


Increasingly, employers are concerned about coordinating the care provided by a wide range of benefit-related companies they contract with, said Thomas Parry, IBI president.

They want to eliminate the service duplications that occur when so many health and productivity providers overlap, Mr. Parry said. They also want to prevent employees from receiving confusing or conflicting messages that can result when there is a potential for workers seeking help to interact with so many different providers.

To help employers learn how to do that, Mr. McSwain and the IBI created a DVD containing how-to instructions for adopting an integrated approach to managing a typical patchwork of benefit program suppliers.

Along with other advice, the DVD provides a checklist for getting started and tools to help employers marshal their suppliers to share information about the range of programs provided for employees.

Silos among providers often prevent the sharing of program data and coordination of benefits delivery, according to the DVD, titled “Winning Together, Turning Vendors into Partners to Improve Workforce Health and Productivity.”

“Whenever we have a lot of silos, we find as employers that it produces a considerable amount of waste,” Mr. McSwain says in the DVD, which the IBI provides to employers free of charge.

That is why employers need to adopt a mindset that, as payers, they can drive service improvement by pushing their suppliers to coordinate with each other, Mr. McSwain said in an interview.


“Don't underestimate your ability to create improvement,” Mr. McSwain advised other employers. “Ultimately you are responsible because you are the payer. They are not going to do it unless they have someone that is pulling them forward. That is why you have to have a vision and point of view about why you are doing it, and that is why we make the tools available.”

While Mr. McSwain now works for Wal-Mart, where he implements such practices, material for the DVD arose from practices he implemented while working at previous employers such Whirlpool Corp.

In one scene, the DVD shows what resulted from a yarn exercise conducted during a “supplier summit.” The exercise included a person standing in the middle of several suppliers with strings of yarn running from the hands of those receiving data to the hands of those sending the data.

The DVD shows a convoluted crisscross of yarn strings.

“We had made our point to all the suppliers in the room about how complicated this is and what critical roles they play and how they have to come out of their silo to truly have terrific employee experience and reduce waste,” Mr. McSwain states in the DVD.

Apart from improving the employee's experience and eliminating waste, Mr. McSwain's supplier management strategy emphasizes helping transition providers along a service improvement continuum that ranks them as either vendors, suppliers or partners.

The more they improve their involvement, flexibility and outcomes focus, the more they move toward partner status.

“Employers, it's safe to say, have rarely used their leverage to create a real business partner that supplies benefit services,” the IBI's Mr. Parry said. “And I think that is what Chris talks about. The message is, "Look, if you are going to do business with me as an employer, then I want you to be a partner. But to be a partner, you have got to do these things.'”