A private healthcare provider with 7,400 team members was pursuing rapid inorganic growth fuelled by acquisitions of over 200 distinct benefits programs. At the time of the annual renewal of these programs, the client was facing a rate increase of 54%—a figure they could not realistically move forward with. In need of an expert, the client turned to Stem.
Harmonizing programs without hindering growth
Stem’s goal was to put the client in a position of harmonizing the program to better address their employee engagement, cost control, and program administration priorities. Above all else, it was important to ensure that the benefits program did not interfere with the client’s robust growth strategy.
Stem designed a “fit-for-purpose” benefits program that allowed for suitable customization and flexibility. This included the introduction of elements like well-being, savings programs, and cost controls through an evidence-based drug formulary. Stem also helped introduce contemporary digital solutions to help amplify the value of the benefits program.
As part of this transformation, Stem canvassed the insurance market and engaged in comprehensive and active negotiations with the insurers. Through this process, they were able to narrow the selection down to a single vendor for benefits, retirement, absence management, and plan administration needs, all while creating a seamless employee experience.
Streamlining benefits with serious savings
The results of this transformation were undeniable. The per-capita benefit premium cost was decreased, and, based on a five-year forecast, projected to result in multi-million-dollar savings. Additionally, there were tangible savings realized on new acquisition benefits in excess of 20%, as well as a recurring cost reduction of over 30% in program cost per employee.
This client is set up for future gains as well. At the time of the first renewal under the plan design introduced by Stem, the client was in a surplus position with an inflationary increase of 1.9%, which was achieved through ongoing program governance, analytics, and insights support.