In May 2022, McKinsey published an analysis of employers’ health benefit priorities based on a September 2021 survey of 1,640 employers. The findings described intentions to expand benefits while managing medical costs. They do not establish that adding a specialist provider produces better care or lower expenditure. For benefits buyers, the useful next step is to define the problem a proposed vendor would be responsible for solving.
Start with an identifiable service gap
A provider’s proposition should be linked to a specific need in the employer’s population. A broad promise of better wellbeing or lower costs offers little basis for assessing a contract. Benefits teams should ask which eligible employees could use the service, how they would reach it and what outcome would justify continuation. The answer needs to account for the arrangements already in place.
An additional supplier can overlap with an insurer, assistance provider or existing programme. Before purchasing, the employer should map who handles each part of the employee journey. Where responsibilities overlap, the contract should identify the party accountable for resolving a request. Employees should not need to diagnose the employer’s procurement structure before finding the appropriate help or understanding whether it is covered.
Separate activity from benefit
Registrations, downloads and appointments show that a service is being used. They do not by themselves establish its effect on health or employer expenditure. A proposed evaluation should explain how the vendor links activity to its claimed outcome and which assumptions remain uncertain. Benefits teams can ask for a definition of the eligible population and the period over which each reported measure is calculated.
Financial claims need particular attention. A projected reduction in claims should be distinguished from expenditure actually avoided, with the service fee and related implementation costs included. Management should ask whether changes in workforce composition, coverage or other interventions could explain the result. A vendor should be able to describe these limitations without treating every unanswered question as a reason to defer scrutiny until renewal.
Agree how information will be used
The employer should understand the information required to run the service and to evaluate it. Access to employee health data should have a defined purpose and appropriate safeguards. Aggregate reporting may be sufficient for management oversight. A proposal that relies on detailed individual information deserves examination by the relevant privacy and clinical specialists before that information becomes part of routine employer reporting.
Operational reports should also show unresolved service problems. A favourable average can obscure employees unable to obtain an appointment or understand a referral. Contracts can provide a route for escalating such issues without exposing unnecessary personal information. The benefits function needs enough evidence to assess delivery, while employees should know which party sees their information and how to obtain help when the process fails.
Put responsibilities into the contract
Procurement should establish what happens when a vendor changes its service, subcontractor or operating model. It should also address how an employee’s ongoing request will be handled if the contract ends. The appropriate terms will depend on the service, but continuity deserves a place in the initial decision. Exit arrangements are harder to assess when a renewal deadline is already approaching.
For multinational programmes, management should verify which countries are genuinely covered and which merely have access to a common portal. Local language, referral arrangements and integration with the insured benefit can determine whether the service works in practice. A consistent global standard can support country decisions without assuming that one implementation demonstrates suitability everywhere or removes the need for local due diligence.
Give the governing body useful evidence
Where an employee-benefit captive has exposure to the programme, its board should understand how vendor decisions interact with retained risk and claims assumptions. An INED can challenge a savings estimate and ask whether management has identified service gaps or conflicts in supplier advice. That oversight supports a reasoned decision without turning the board into the operator of the health service.
This editor recommends a short decision record for each material addition: the need, accountable owner, expected outcome, evaluation method and exit arrangements. The historical survey helps explain why employers were considering more services; it cannot substitute for that record. A disciplined review allows management to support an effective provider, correct a weak implementation or end an arrangement with an intelligible explanation of the evidence behind its decision.
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