Castlight recently convened a small group of employers, along with Forrester Research, Inc. Vice President and Principal Analyst, Paul Hamerman, to discuss the challenges and obstacles they face associated with Enterprise Healthcare Management and turning this massive expense into a strategic advantage.
Innovation in the cloud – say what?
Hamerman shared his knowledge with the group, having been an analyst in HR and the financial and ERP spaces for nearly 14 years. When asked about some of the main areas of innovation that he has seen in recent years, Hamerman cited mobile, social, analytics and cloud.
“Virtually every [solution at the HR Technology Conference & Expo®] is sold as a cloud solution — in most cases, exclusively as a cloud solution — which is not true for many other categories of software,” said Hamerman, also citing innovation in adopting mobile technology for employee – and manager – facing functions. In discussing how cloud has changed the way in which companies run their businesses, Hamerman noted that cloud technology is “transformational,” releasing the business owner from the constraints of IT and enabling HR to own the solution.
What’s in a cloud, anyway? As Hamerman noted, cloud is a broad term, covering infrastructure as a service, platform as a service, and software as a service (SaaS), with HR applications being grouped in the latter. “And good systems, whether they’re cloud or on-premise, […] were really designed for a tremendous amount of inherent software flexibility,” said Hamerman. Case in point? “Nowadays, when you select software, it’s more a matter of looking at the usability and the flexibility of the software instead of this long checklist of functions and features,” he said.
As the recent $8.3 billion SAP SE acquisition of Concur Technologies, Inc. supports, where there are large costs that must be controlled – such as those in the Enterprise Healthcare Management category – there is a growing need for technology solutions to come in and do just that. Specifically, Hamerman drew a parallel between managing employee travel spend and healthcare costs, citing that solutions can’t simply manage overall spend, but must link it back to value for the business. “If you think about benefits in general, and healthcare in particular, it’s really a very cherished thing that a company provides to you. And you want to be able to link the spending that you make on healthcare to the value of retaining your best employees,” Hamerman said.
Healthcare benefits impacting employee engagement and retention:
But do healthcare benefits have an impact on employee engagement and retention? Does it really matter to employees if their employers are willing to invest and provide them with these benefits? According to Hamerman, “I really think it does matter. I mean, it’s one of the things that makes companies competitive as an employer. […] Employees tend to gravitate to the companies that have the best benefit packages, and healthcare in particular is, I think, really the ultimate benefit.”
This ultimate benefit comes at a premium cost, however, and it’s one that needs to be managed at the enterprise level. With employers currently spending $620 billion a year on employee healthcare costs, and 30% of that spend being wasted, why is there such a large gap between Enterprise Healthcare Management and available technology solutions designed to address this specific need? With a technology platform in place that allows employers to carefully control spend and design benefits based on specific business objectives and employee populations, the value of managing this benefit is no longer priceless.
So what is the role of big data?
Another technology area that has benefitted greatly in recent years and that was discussed in detail throughout the HR Tech program? Data analytics. “Big data, in-memory computing, predictive analytics, prescriptive analytics — all this […] helps to understand data and really explore massive amounts of data,” which is a critical component for reigning in and understanding the costs of healthcare, Hamerman said.
In looking through a data-focused lens, applying analytics is just one way that technology can drive Enterprise Healthcare Management improvements. When both employers and employees have access to the right information at the right time, an Enterprise Healthcare Management solution can actively turn a top three business expense into a strategic, competitive advantage. And when the competitive advantage also impacts employee retention and engagement, the benefits become even more apparent — driving down costs and increasing access to quality, affordable care while simultaneously attracting and keeping top talent.