Key insight: Understand the advantages of integrating procurement services into benefit planning teams.
What's at stake: Employers who fail to align their internal and external benefits planning teams risk outdated, less cost-effective plans.
Expert quote: "You need multiple support mechanisms internally and externally to develop the right benefits plan." — James Bouchard, LogicSource
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Specializing in vendor management, contract negotiation, and seeking competitive requests for proposals (RFPs), procurement experts can work alongside internal decision-makers and brokers to offer unbiased assistance and
"You need multiple support mechanisms internally and externally to develop the right benefits plan," said James Bouchard, partner at procurement and tech firm LogicSource's Center of Excellence. The company works with employers like Cleveland Clinic, Lululemon, Titleist and Tractor Supply.
Bouchard outlined a four-part approach to the ideal team setup:
- HR leadership team "because they understand the employee population, how benefits tie to compensation, and how to use that to retain and attract new talent."
- Finance partners "now more than ever because costs are going up more substantially than they ever have before."
- A broker "because they understand plan design and how to partner with HR to develop the overarching solution."
- Procurement support "to ensure that you are evaluating not just your broker relationships effectively, but your carrier partnerships and
your PBM relationship , and you're bringing in all of the new capabilities that are entering the market, and evaluating them from that procurement lens."
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Bouchard shared more about the specific role of procurement services and how to get a head start on future benefit planning. This interview has been edited for length and clarity.
What sets the role of procurement services apart in the benefits-design process?
Procurement understands how to evaluate suppliers holistically, not just out of cost, but from capability and risk mitigation. [It] also knows how to get you to the best price. So by bringing procurement into the process and having a relationship where everybody is in the room from the beginning, you're pulling from everybody's greatest strengths, and you're doing a couple [more] things:
- Making sure that the broker is not being too complacent. It's easy to continue with the status quo; new capabilities aren't necessarily being brought forth.
- When brokers run the carrier medical RFPs or PBM RFPs, they don't have that procurement mindset, so there are often dollars left on the table because they're not pushing aggressively from a cost-negotiation perspective.
- There has been such a massive entry of point of care solutions and specialty providers that offer ways to address a small component of your benefits, that the broker team isn't necessarily staffed to evaluate the totality of the offerings out there. If we want to look at … all of those third parties that do something different, you need a bigger team to do that, and you need a team that understands how to do supplier evaluations. Procurement can bridge the gap between the existing capability and headcount of the brokerage team that's assigned to that customer.
- We are a purely supplier-agnostic firm, which means we don't have any compensation arrangements with suppliers. As an organization, we don't even get funded based on savings that we deliver, so there is no skin in the game for us beyond ensuring our customers have the best collective solution to support the benefits program.
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What should benefit leaders be doing to get a jump start on future planning?
There's very little any organization can do today to really impact 2027. So it's now about 2028, and if you don't have a thoughtful, collaborative approach with all parties thinking about this at the right time, you're going to be caught off foot. What we recommend is, if you're on a calendar year for your benefits, your planning session should start in December of this year to really maximize your opportunities for 2028. That is an in-person, multi-hour CHRO, CFO, broker and procurement broker [meeting]. Then having a sourcing strategy developed by the middle of January is the best practice.
The real benefit of having a procurement seat at the table is, one, we're going to make sure that this planning begins early. If you start early and you prioritize what we'll call your total cost of ownership — that's understanding the entire brokerage relationship, what they're doing, what they're earning — it's understanding your actual benefits expenses from administrative fees to third-party payments to claims expenses, then being able to leverage what's happening in the claims expenses space to start pinpointing the biggest areas of opportunity.
Then you go into the 'Well, we have areas that we want to focus on this year: We want to look at GLP-1s, musculoskeletal, imaging, cancer…" and that means you can create a very focused procurement plan to address that over the four-month window that you need to make the right decisions by April and May, so that you can execute this plan for your following benefits year.
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When benefit leaders can build an aligned support group, how does that improve overall outcomes?
A lot of that heavy lifting is done between the procurement team and the broker. They have to have a good working relationship and a good partnership … [to reduce] benefits expense while also trying to improve employee experience.
