A Fortune 100 healthcare system had been with its administrative vendor for over 15 years without a competitive bidding process. The vendor administered defined benefit, defined contribution and health & welfare plans under a contract worth tens of millions of dollars. After experiencing service issues across all three benefits areas, executive leadership began to suspect that its administrator’s fees were out of line with the market. The company was especially interested in understanding how other vendors were utilizing technology to deliver better service.
The healthcare system engaged SBA to develop and manage an RFP encompassing all three benefit areas. The SBA team led the full RFP process and worked closely with client stakeholders on key tasks including:
- Soliciting input from internal stakeholders (e.g., payroll, IT, purchasing)
- Educating internal stakeholders on administration trends, emerging vendors, recent mergers, and other important industry factors
- Analyzing the current contract, service set, service level agreement and associated fees
- Tabulating actual vendor expenses paid over the last 12 months
- Defining an optimal baseline service set and identifying service areas in need of improvement
- Researching, identifying and contacting potential vendor partners
- Writing the RFP and executing a full search process, including vendor qualification, site visits and reference checking
- Leading the vendor evaluation and selection process
- Negotiating contract and service-level agreement terms with the chosen vendor
- Providing expert implementation resources to ensure a successful transition
As an independent third party, SBA was the ideal partner to manage the RFP process, allowing the plan sponsor’s benefits team to stay focused on its core responsibilities. With SBA’s guidance, the healthcare system chose a forward-thinking vendor partner that harnessed technology to deliver the required services in an efficient, integrated manner. The client received a wider set of services for more than a 40% reduction in fees, and meaningful service-level agreements were put in place to ensure the vendor’s focus remained aligned with the client’s business objectives.
