Efficiency vs. Effectiveness
There has been a lot of discussion lately about the changing nature of the CFO’s role. There are many people who write eloquently on the subject, and I am a huge fan of Peter Chisambara of ERMP Insight.
His latest blog post, Finance Transformation: From Efficiency to Effectiveness, talks about how the CFO and the finance department are helping different business units execute more strategically.
I believe this task should extend to the healthcare spend. Adding predictability and control to the healthcare spend will allow the C-Suite to have more meaningful conversations about headcount reduction, or not adding benefits, rather than taking them away, turning the healthcare spend into a capital expense with a measurable ROI rather than an operating expense
Typically, the goal of the healthcare plan is retention and recruitment. Let’s get back to that, not further away from it. Today’s healthcare plans are a huge expense for the employer and often unusable for the employee. No wonder everyone is aggravated!!!
Sounds great, right? But, how?
As a CFO with P&L responsibility, you manage every department’s expenses.. except the benefits spend. It’s time to change that. You have probably been told that your plan is a “black budget” do to privacy issues and that you are “receiving the best possible discounts.”
When I hear that, I think I am paying the best price. That is not necessarily true. And what about the quality of care? Historically, it was nearly impossible to predict and control a company’s healthcare budget.
Today, due to new solutions, strategies, technology, and a wealth of data, business leaders can (and are) taking back control of their healthcare budgets to reclaim trapped profits while delivering a benefits package that leads to healthier, happier, more engaged employees that are more fulfilled and more productive.
We call the solution the BenefitsAdvantage Roadmap
1. Uncover the hidden cost drivers – Do you know what commissions you are actually paying? What diagnoses are driving your costs? Are your employees really receiving quality care? All these questions are answerable now.
2. Uncover the hidden savings opportunities – Who offers the best care at the most effective cost (EASY to find out)? Do your vendors have a fiduciary responsibility to you, rather than each other? If not, you are missing out on substantial savings.
3. Design your customized roadmap to savings, cost control and predictability – Every employer is a bit different. Design a plan that works for you.
4. Roll it out – Communicate the h@ll out of it! Employees have budgets too. If they no how to extract the maximum value from the plan, your plan will benefit
5. Refine and Optimize – Make it more effective, year after year
You wouldn’t let your employee go off and buy their own computer or desk or supplies on your dime without knowing what it costs. Why let them do it with your medical plan dollars?