Cost reduction and performance improvement: procurement

The challenge

Payers increasingly recognize the value proposition that external - and often offshore - vendors can handle many support functions more efficiently than in-house operations. "Ancillary" functions such as IT, and business processes such as claims adjudication, call centers, customer service, enrollment and billing are frequent targets for outsourcing.

To increase the value of their outsourcing relationships, payers should establish a vendor management organization or a program management structure that helps them drive change, institutionalize their processes, measure outcomes and continually evaluate the business case for outsourcing. The vendor management organization can assist the enterprise in structuring the right outsourcing contracts, negotiate appropriate service levels, leverage economies of scale and drive process improvement and ongoing innovation based on best-available technology and business practices. Post-contracting, the vendor management organization plays an important role in managing a comprehensive plan for transitioning processes to vendors and for managing vendor relationships to ensure maximum, sustainable benefits.

How we can help you

Payers frequently outsource support services in a piecemeal fashion, without an enterprise-wide strategy. A more coherent outsourcing strategy leads to more successful outcomes.

We can help you devise a holistic outsourcing strategy and select vendors based on their capabilities, performance and suitability to that strategy. We can provide guidance, independent validation and verification and management oversight to properly transition and consolidate your business-critical functions, helping you achieve the best value from your outsourcing relationships.

Common services include:

• Devising a holistic outsourcing strategy
• Vendor selection and verification
• Establishing a vendor management organization