Gain the oversight you need to manage your health plan’s third-party services providers.
Recently, a client shared with us that the IT cost to bring on a health plan vendor was $70k. That stopped us in our tracks. $70k is, in our opinion, way too much for a health plan to invest in bringing on a new vendor. The worst part? This client told us that there was no reliable way to quantify their investment: they lacked any oversight over the vendor or insight into their activities. Without the ability to manage a new vendor, which would allow them to fully realize their return on investment, our client shared, “I’m beyond angry. I’m just apathetic at this point.”
That got us to thinking. How many health plans and payers view vendors as a hassle? Are you ready to throw your hands up in the air? Don’t surrender, because we’ve got great news. Technology exists to handle and optimize all health plan vendor activity you may have stacked across departments.
We refer you back to a recent post we wrote titled “Maximize Value & Partnership with Your Third-Party Payment Integrity Vendors.” In that article, we gave you six questions designed to help you realize the ROI from your vendors. Point 2 is particularly relevant to this topic, as it asks, “Do you have multiple vendors stacked across all of your services?” If you’ve arrived at this post, the answer is likely “yes” – or you know it should be. So, let’s dive a little deeper into a solution that eliminates the hassle and costs of a vendor investment and instead delivers real-time transparency.
Empower your health plan vendors to provide greater value.
Third-party vendors can add tremendous value to a health plan, no question. But that value is much greater when a health plan is able to effectively manage the vendor. Of course, chances are you’re acutely aware of this pain point. The problem is that traditionally, vendors haven’t been able to provide transparent access to their processes and data. But transparency and access are exactly what’s required to effectively manage vendors.
Think of this in terms of the supply chain, where vendors must be managed at each stage to meet supply and demand. Walmart, for example, has honed their vendor management process to a fine art, each cog working perfectly to meet consumer demand. To do this, the $500 billion company utilizes a vendor-managed inventory model. Their model provides information to suppliers about inventory, who then send restocks to Walmart when a product runs low. Walmart in turn manages and controls how the goods are transported and where they arrive.
The company runs their supply chain with an on-time, in-full (OTIF) policy, giving suppliers a very short window in which to ship inventory. How do they achieve this? Insights, forecasting, and investments in data and planning all have contributed to Walmart’s success.
Communication is key.
Imagine if your health plan was able to harness the same sort of tools, applying them to vendor management in order to acquire oversight and visibility? You can. Technology exists to provide the same level of data access and transparency, on a platform created specifically to suit health plans. With a comprehensive solution (such as our own, Pareo®), you can:
- Prevent overlap
- Track progress on identified overpayments
- Access analytics to reveal which vendors are performing best, and where they’re providing the most value
By communicating with your vendors fluently and fluidly for a productive feedback loop, you can set clear expectations (thereby increasing the likelihood of them being met). Think of how much more control you’ll have when you transfer your focus from blind reaction to proactive, strategic efforts.
Better managing through data.
As we said earlier, adding a new vendor shouldn’t require a $70k investment. The right third-party services provider should enhance your profitability – if you have the proper technology and processes in place. We recently published an article where we offer five broad areas of value for health plans and payers to assess this ROI. Financial value number 3, “Ability to Expand the Current Vendor Footprint,” introduces the idea that proper vendor management allows a health plan to stack vendors and optimize value (be sure to visit the original post for more details on calculating this metric).
Health plans are actively seeking innovative solutions, which many vendors offer. But with so many vendors stacked across a health plan ecosystem, we believe integrative transparency is key to improving vendor performance. With the right technology, health plans can further these returns by employing best practices for third-party management. Some of these practices include vendor screening, risk assessment and management, and oversight of data and security protocols, all made easier with a vendor management platform in place.
If you, like our client, are beyond angry at the failures of vendor integrations and the high costs associated with them, we’d like to talk to you. Pareo is more than a vendor management platform. It offers a 360-degree solution for health plans that seek higher returns and more efficient revenue operations.