Want to Boost Your Bottom Line AND Help Your Employees? Transform Your Healthcare Plan

Summary

Former CHRO Thomas Plath outlines a practical roadmap for employers to remake self-insured health care plans in ways that both reduce spend and improve employee outcomes. Drawing on experience leading a Fortune 500 transformation and work with a health‑care alliance, Plath presents six execution strategies: build a cross‑functional team, focus on fundamentals of the supply chain, harness data analytics, reassess carriers, scrutinise PBMs, and actively engage employees. The article argues that these steps, while complex, deliver measurable savings and better care.

Key Points

Assemble a cross‑functional, ongoing process team (HR, benefits, purchasing, finance, IT, legal and unions where relevant) to own the transformation.
Map and understand the health‑care supply chain, follow the money, and use strategic tools (SWOT, Porter’s Five Forces, stakeholder analysis).
Invest in data access and analytics — insource, outsource or hybrid — to track prescriptions, treatments, claims and outcomes and drive continuous improvement.
Reevaluate your insurer/carrier via contract review and RFPs — carriers control networks, claims administration and much of the spend.
Scrutinise Pharmaceutical Benefits Managers (PBMs) and issue RFPs; consider pass‑through PBMs and watch specialty drugs and rebate flows closely.
Engage employees openly — gather feedback, act on it, and communicate changes to improve culture and perceptions of care.

Content summary

Plath stresses that transforming a self‑insured plan is both strategic and operational. He places emphasis on continuity (treating transformation as a process, not a one‑off project) and on giving unions or employee representatives a seat at the table where applicable. He advises leaders to relentlessly follow cost flows and contractual details, to push through supplier resistance to share data, and to prepare for tough negotiations with carriers and PBMs. The payoff reported — in his alliance of 80 employers with $40bn combined spend — is nearly $2bn in annual savings alongside improved care for employees and families.

The article closes by acknowledging complexity but reiterating that diligent, data‑driven, cross‑functional work delivers tangible benefits for the company, its people and the bottom line.

Context and relevance

This piece is timely for senior HR, benefits, procurement and finance leaders wrestling with rising health‑care costs and retention challenges. It ties into broader trends: employer cost containment, the shift to self‑insurance, scrutiny of PBMs and specialty drug inflation, and the growing role of analytics and AI in benefits management. For organisations with significant health‑care spend, the strategies here can materially affect P&L and employee experience.

Why should I read this?

Quick answer: because it’s a practical, no‑nonsense playbook from someone who’s done it. If you run or influence benefits, this saves you time — real steps you can start using (team, data, RFPs, employee engagement). No fluff, just what to do first and why it matters.

Author style

Punchy. Plath writes as an experienced practitioner: concise, action‑focused and results‑driven. If you care about cutting costs without cutting corners on care, read the detail — the tactics are where the savings hide.