Within the employee benefit market, the term point solution has become watered down and leveraged for all add-on programs that complement a core benefit offering. Unfortunately, this has led many benefit professionals to feel like point solutions do not add value. The truth is that some point solutions add immense value while others fall short, but the challenge is the answer is different for each employer.

Employers must consider their healthcare and employee benefit spend, including but not limited to potential incentives; corporate culture and goals related to employee engagement, health and productivity; capability and service guarantees with core providers; and anticipated utilization of core and point solutions to evaluate their offerings and where point solutions may make sense.

Assess Current Offerings

The first step in considering point solutions is to evaluate your current offering(s). Catalog your current partners, what services they perform, what you are paying them, and when your contract renews. In addition, summarize any performance guarantees or return on investment metrics as well as standard reporting that is provided and at what frequency. 

For most employers, this exercise in gathering data related to your offerings will shine a spotlight on a few critical areas:

• Where does overlap exist?
• How much spend is tied to “optional” programs?
• How much data is readily available?
• Are there programs demonstrating value?
• Are there contractual limitations to change?

In order to address these questions and come to any conclusions regarding your point solutions, this assessment needs to run in tandem to a market analysis.

Understand the Market

It is important to understand the plethora of solutions available in the market. The most efficient way to gather this intelligence is to talk with your current health plan and broker/consultant. We help many clients, including edHEALTH, on mapping out and understanding the universe of options in the realm of point solutions and then creating a targeted strategy based on tailored benchmarks. But don’t stop there. Find other resources that can educate you on options, perhaps another advisor or an industry conference. These conversations do not require a deep dive (yet) into each solution. Instead, they should provide enough for you to think about what’s possible as you compare and contrast what you have versus what you anticipate needing in the future.

Identify Pain Points

The most valuable point solutions work to solve a pain point that your core health offering cannot address as well as serve as a targeted comprehensive solution. This is why solutions around specific diagnoses have evolved (e.g., musculoskeletal, cancer, fertility, hypertension, etc.) and for engaged claimants often provide better experiences, more favorable outcomes and even potential cost savings. 

Consider your pain points both qualitatively and quantitatively. Look at data from employees to understand what is not working well for them in the process. Then look at the data from your health plan and understand where you are above their benchmark in spend by major diagnostic category, or have any outliers in the data. For example, our client edHEALTH, a captive for educational institutions, recently began offering a new diabetes management program, which was implemented based on their member schools’ input and supporting data.

Bringing it all Together

Once you have assessed your current offering, gotten a better understanding of what is available in the market, and identified your pain points, it’s time to compare and contrast those three areas of review and arrive at your desired future state. 

Start where program overlaps exist and see if you can simply remove programs without employees experiencing a loss in coverage/benefit. In some instances, those overlapping programs may be provided free of charge from your vendor but still may cause confusion among your employees or be absorbing credits that could be used for other programs. In addition, vendors may be willing to negotiate removal of those services, freeing up funds for other programs. 

After you have explored overlapping programs, consider programs that are currently offered but do not seem to align with your pain points. It’s possible that a point solution is working so well and achieving the desired impact that it is positively impacting spend. If so, this is a point solution you want to continue. Your vendor partner should be able to demonstrate via data how the point solution is working, what employees/claimants are being impacted and how to continue these favorable results. If the vendor partner cannot prove successful data for your population, be skeptical; it may still be a value-add program, but some cynicism is helpful in this very complicated review of point solutions. 

Once you have reviewed overlapping programs and those that do not align with your pain points, you should review all other point solutions against market offerings. Ensure your solutions are keeping pace with the market both in pricing as well as service offering and performance standards. For programs involving considerable spend, a request for proposal (RFP) may be necessary,. For programs with minimal spend, a few calls with competitors may provide enough insight to determine if an RFP is necessary. If your solutions are not competitive, do not have appropriate performance standards, or have not demonstrated their value, you should consider replacing them or, at a minimum, renegotiate with strong performance or return on investment parameters. 

This review must be data driven, but it will often involve both art and science. Sometimes a program may be a worthy partnership for your culture even if cost savings may not materialize. Only you and your team will be able to make that decision, but just because the decision is not solely routed in cost savings doesn’t mean you shouldn’t track utilization, engagement and return on investment. Those may be even more critical for programs that will need to be defended in the future.  Many HR and benefits professionals are feeling point solution fatigue, and are asking questions around impact, risk, and reward. If you could use assistance conducting a point solution audit, or would like advice on best practices in this area, please get in touch with the Spring team.