Smaller is Better

May 1, 2018

Working with a small provider offers big opportunities for health plans

In the world of healthcare, the concept “bigger is always better” often prevails. Superficially, it makes sense that a health plan can mitigate risk by working with a large company that has big clients and big resources. However, dive a little deeper and it isn’t always the case, especially in the realm of rapidly changing technology. A technology firm doesn’t have to be huge to serve large clients. In fact, a small, optimized technology provider may do more for your health plan than an organization twice the size.

Why should you work with a small technology and services provider?

Are you ready to take the “risk” on a smaller, newer company that fewer folks have worked with? We see many health plan procurement processes created with larger companies in mind. But choosing a vendor just because they’re big may not be the right strategy for a health plan – especially if you need expertise in a particular line of business.

Smaller companies tend to focus on a couple of pain points and pour all of their resources into alleviating that pain. Larger companies claim to be “experts” across many areas, but the reality is their expertise is limited because of lack of focus. Unless a brand-name generalist is exactly what your health plan needs, procurement managers should look to cast a wider net to capture the smaller, more innovative companies in their processes. Here are three other reasons a smaller partner may be a better choice.

Nimble Processes = More Customization

Realise Data Systems points out that the misconception of “bigger is better” has a fatal flaw: bigger systems often require bigger processes. And the larger the process, the more likely it is to fail. “Large processes are prone to inefficiency, a lack of innovation, and organizational silos,” writes RDS, which contrasts with small providers who “are more likely to be willing and able to modify the way they operate to meet a particular set of requirements.”

The takeaway? A smaller organization comes with a smaller, more flexible process. That means they are nimble and quick to implement customizations for clients because there are fewer inefficiencies and hurdles. “Smaller companies that choose to target a specific industry are often founded by people who worked in that particular industry and recognized a need for software tailored to that industry,” explains one software writer. Small tech companies design themselves to be super problem solvers.

Customer-Centric Mentality

A small business has to work harder for their clients – and often, they like it that way. “When you buy from a larger company, you are a small fish in a big pond,” writes Sam Ashe-Edmunds, Chronicle contributor. Ashe-Edmunds points out that with a smaller company, a lot more is on the line. “Smaller companies often want to keep any business they can secure,” resulting in a customer-centric mentality.

Stellar customer service isn’t the only thing a smaller tech provider will offer. Often, these startups are built around innovation, offering solutions that aren’t available from larger vendors who may be “locked-in” with legacy software and outdated information.

“While corporations tend to take more calculated risks and have a slower tempo, startups tend to be small teams of light-structured firms with flat hierarchies that are faster and more willing to overturn existing models if necessary to serve market needs better,” according to professors at the IESE Business School.

Perspectives That Add Value

Technology is moving at a pace that many big vendors have a hard time keeping up with, while the legal backing and frameworks established by large-scale tech providers are often what attract big health plans. In a report titled “Collaborate to Innovate,” surveyed a large base of startup owners as well as large corporations. They found that up to 70% of startups had collaborated with corporations, meaning that the majority of big businesses are willing to work with smaller vendors. Why is that?

According to the report, “Tackling innovation from the inside-out requires significant cultural shift and investment, as explained by Jorge Rivero from Vinci Energies: ‘Innovation is much more than having ‘good ideas;’ it is about culture, business processes, planning and strategy.’” Small vendors can add perspectives, especially regarding technology and innovation, that equate to real value for large health plans and payers (statistics back the idea that supplier diversity leads to more profitable business).

ClarisHealth is Smaller – And Better Because of It

We designed Pareo – our payment integrity solution – to disrupt the market, which currently does very little to supply health plans with comprehensive payment integrity initiatives and solutions. As a small technology-enabled services provider, we think it benefits clients to work with a team that is quick, creative, able to cater to specific needs, and on the cutting edge of the tech revolution in healthcare.

It’s because of our size that we think large health plans, payers and providers benefit from our solution-oriented platform. Find out more about how our smaller company brings big results by contacting us today.

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