9 in 10 employers plan to change health and wellbeing vendors in 2023 or 2024

In an effort to meet the needs of their employees and improve worker health, employers are taking a close look at the value and cost savings their vendors promise and are ready to make changes as needed, says a new survey.

As a result of COVID-19, employees are seeking more support from their employers for mental and emotional health issues, and even reassessing the importance of meaning and purpose in their work. (Image: Shutterstock)

Most U.S. employers are making changes to their vendor partnerships that provide health care and wellbeing benefits to employees, according to a survey by WTW, a leading global advisory, broking, and solutions company. The moves are an attempt to address a broader range of employee needs.

“High-performing health and wellbeing vendors are now vital to employers. They have become a critical component of competitive benefit and wellbeing programs [as well as] strategic to their portfolio,” Courtney Stubblefield, a senior director at WTW, said in a statement. “However, in an effort to meet the needs of their employees and improve worker health, employers are taking a close look at the value and cost savings their vendors promise. What’s more, they are ready to make changes as needed.”

WTW’s survey of 232 U.S. employers that collectively employ 3 million workers found nearly nine in 10 respondents (88%) are planning to make changes to their vendor partnerships either this year or next. Such changes include adding, enhancing, or ending various solutions and services, or working with a different vendor in the foreseeable future.

The primary changes respondents have made or are planning to make to their vendor partnerships include:

“The level of employer activity to enhance their health and wellbeing vendor portfolios supports the notion that employees now want vendors as part of a competitive benefit package,” Stubblefield told BenefitsPRO. “The wider use and acceptance of vendors has led to new expectations, however. Employers now seek vendors that can do more, such as supporting a broader range of needs, delivering newer innovation, guaranteeing cost savings, and integrating well with existing programs.”

Related: 2023 will be the year of the employee: Here’s how employers can offer innovative benefits

Survey respondents ranked mental health and general wellbeing as their top two areas of focus for vendor solutions over the next two years; financial wellbeing was fifth.

“All employers need to consider vendors as part of their strategy to address the diverse needs of their population,” Regina Ihrke, a senior director at WTW said in a statement. “Companies prioritize ROI but need a broader definition of ROI that includes choices based on driving quality, filling the gap in core offerings and lowering cost.”

Ihrke and Stubblefield also suggest evaluating strategies to determine if they are working, optimizing current partners, and considering whether they need to embrace innovation in the market — not always an easy process.

“It requires using a mix of internal staff and third-party support, such as consultant or data experts,” Stubblefield told BenefitsPRO. “Effective vendor management requires thoughtful governance structure, modernized metrics that are connected to the overall strategy, performance evaluation, and good account management. Reporting should be frequent — more than annually — and integrated with other programs connected to the vendor.”

Ways to better evaluate vendors include understanding engagement levels, validated methods to assess impact on return on investment, member experience/satisfaction, and performance on operational audits and clinical reviews, she added.

WTW has created an infographic summarizing the survey results.

Recommended Stories