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HighRoads' employee health and benefits solution automates the administration and evaluation of our health care vendors, allowing our HR team to focus on more strategic, higher value tasks."
- Kathy Durbin, Director of Benefits at H-E-B

H-E-B

H-E-B Cures Its Health Care Spend and Improves Vendor Management through the Use HighRoads HR Control

Overview

H-E-B, with sales of more than $15 billion operates more than 300 stores in Texas and Mexico. Known for its innovation and community service, H-E-B celebrated its 100th anniversary in 2005. Recognized for its fresh food, quality products, convenient services, and a commitment to environmental responsibility and sustainability, H-E-B strives to provide the best customer experience at every day low prices. Based in San Antonio, H-E-B employs more than 70,000 Partners and serves millions of customers in more than 150 communities.

Business Challenge

With health care costs rising at double-digit rates, retailers with extremely thin margins were seeing a significant burden. Every expense needed to be carefully managed. Even the smallest increase in a major expense such as employee benefits could mean the difference between reporting a profit or a loss. H-E-B had to re-evaluate their HR processes. In doing so, they realized that they were inefficient, spending too much money, and they weren't re-using their data to be strategic.

H-E-B was faced with their health care costs being out of control and threatening to eat up their profits. "Like most companies, we are here to make a profit and it's extremely difficult in the retail industry when your margins are only 1-2%," said Kathy Durbin, Director of Benefits at H-E-B. "If we didn't make some necessary changes we wouldn't be in business in 5 years."

The need to expand best practices throughout the entire benefits lifecycle was crucial – from building an RFP to conducting the RFP event through analyzing the proposals and selecting the vendor. It also meant that once they selected a vendor, the management of the vendor's performance needed to be closely monitored and aligned to H-E-B's strategic initiatives. Lastly, H-E-B had to centralize and store their data so that it could be securely passed both internally among departments, functional areas and externally to and from vendors and administrators allowing collaboration and workflow across all stakeholders.

The HighRoads HR Control Solution

The challenge facing H-E-B's HR department was to implement new processes and procedures that would help lower employee benefits expense without sacrificing the quality of the benefits programs. To realize these goals, H-E-B turned toward HighRoads HR Control suite for help. HighRoads HR Control suite provides complete benefits supply chain management. These packaged solutions are delivered and supported by HighRoads HR information specialists, an experienced team with domain expertise in corporate benefits and technology.

Their goal was to automate manual tasks and simplify the process with hopes of improving analysis of benefits providers and plans through better information, reducing employee benefit costs through better price negotiation, and increasing staff productivity through reduced cycle times.

HighRoads HR Control suite provides H-E-B with one system of record for managing all of their HR programs and vendor content to reduce health care costs. H-E-B's top issues were resolved with HighRoads by:

• Improving data management – Data can be found in a single location, in a single format allowing H-E-B to make more strategic decisions
• Reducing benefits expenses – By taking plans out to bid H-E-B saved 18% of their administrative costs
• Reducing time spent on vendor management – Automated penalty calculations were implemented to ensure fees were being collected from vendors not performing to contractual obligations

"I don't have to worry about the details or if something is due. HighRoads manages all the deadlines so we can focus on being strategic," said Durbin.

Results

To accomplish an ambitious goal of streamlining the entire benefits lifecycle, reduce overall costs and continue to provide competitive benefits packages to the company's partners, H-E-B adopted a more holistic approach to managing the HR process, ensuring visibility, value and control over the entire process.

With their improved data management process, H-E-B now uses 'one system of record' for over 400 documents which include; plan designs and pricing models from RFPs, contracts, performance guarantees, legal and SPD documents. They have up to 25 system users that include employees in HR, IT, total rewards and 2 external consultants. It leverages current and historical information to be reviewed and reports across multiple variables. H-E-B is able to reap efficiency benefits by shifting focus to strategic initiatives, eliminating the need to re-key data into multiple systems, expanding and improving employee offerings and doing far more with less.

And finally, H-E-B's need to manage their vendors more effectively, stemmed from improving their employees satisfaction. By encouraging vendor integration, H-E-B created a vendor summit focusing on health care costs. Meeting attendees brainstormed cost-cutting strategies in small groups. Then the groups shared their ideas, some of which H-E-B implemented, including changing their pharmacy and medical plan designs for immediate cost-savings.

Not only have the vendor summits contributed to their success, so has the implementation of collecting and monitoring service level agreements by vendors. "HighRoads helped us manage our vendors by taking the language from our SLA's and store them in a centralized database," said Durbin. "With the specific due dates associated with each contract, we are able to manage our vendors more easily with monthly, quarterly or yearly reports."

Since working with HighRoads, H-E-B has seen significant cost savings in their health care spend including a decrease of 3.7% versus the national trend of a 9.2% increase.

About HighRoads

The world's largest employers choose HighRoads to gain complete control over their health care costs and compliance. With HighRoads' service, employers – for the first time – have online access to benefits plan information and pricing, competitive benefits benchmarks, and complete health care supply chain management. The privately-held company is headquartered in Woburn, Mass.