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HighRoads has helped us deliver the best possible plans at the right price, while establishing a highly repeatable process for continually driving value to the organization."
— Peter Hayes, Director of Health Care Strategy at Hannaford

Hannaford Bros. Supermarkets

Hannaford Bros., Cut Its Overall Health Care Costs By Using HighRoads HR Control

Overview

Hannaford Bros. may have started as a fruit and vegetable stand in 1883, but it has expanded from its Maine roots to become an upscale grocer with about 165 stores under the Hannaford Supermarkets banner throughout Maine, Massachusetts, New Hampshire, upstate New York, and Vermont. Still, produce continues to be a major focus at the Hannaford supermarkets, as are expansive meat selections and natural food products. More than 75% of the Hannaford stores are combination grocery stores and pharmacies. The stores average about 48,500 sq. ft. Maine's largest supermarket chain, Hannaford Bros. is owned by Delhaize America (parent of Food Lion), which in turn is owned by Belgium's Delhaize Group.

Business Challenge

The retail food industry is a competitive industry with extremely thin margins so careful management of costs plays a significant role on the bottom line. With employee health care costs comprising a large portion of corporate expenses, controlling this cost was critical at Hannaford.

This challenge led the human resources (HR) group to look for a way to reduce costs without lowering the quality of their health care initiatives. Several health care plans were scheduled to go out to bid and Hannaford wanted to lower the cost of these plans, without having the HR staff consumed by the process.

"For us, any time we think about changing a vendor—it's a huge undertaking," said Peter Hayes, Director of Health Care Strategy, Hannaford Bros. "We estimate that changing one vendor would cost us $100,000, substantial amount of staff time, and disruption [for our employees] if not done properly."

The HighRoads HR Control Solution

To tackle its mounting procurement challenge, Hannaford turned to HighRoads' Procurement Service, a component of its overall HR Control suite of services for 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.

Traditionally, the request for proposal (RFP) process at Hannaford was a resource-consuming process, monopolizing staff time and relying heavily on paper-based workflows. Creating a competitive environment by inviting more vendors to bid without increasing cycle time, impacting staff productivity, or generating additional expenses, Hannaford was able to conduct the entire RFP process online. HighRoads Procurement service supported analysis of the bids by weighing, scoring, and comparing the qualitative and quantitative information within each vendor bid.

"In the past when we wanted to take a plan out to bid, we would go to the national consulting houses—a 6 month process," said Hayes "We would then receive reams of paper in return. With HighRoads, which is unique, you can get to market quicker and have apple to apple comparisons."

Results

HighRoads' Procurement Service, a component of its overall HR Control suite of services, provided unprecedented levels of visibility to information across multiple plans, processes and transactions to support informed decision-making and uncover opportunities for streamlined management. This insight enables employers to provide the highest quality of employee health at substantially lower costs.

By giving the ability to automate the heavy-lifting of benefit administration, freeing HR teams to focus on higher value activities like strategic plan design and measuring program effectiveness. Hannaford—for the first time—was able to see some of the following benefits:

• End-to-end management of the procurement process—HighRoads built the RFP, sent the RFPs to vendors, collected the proposals, handled re-bids, and consolidated all responses for analysis through an online process.
• Reduce costs associated with vendor bids—HighRoads allowed vendors to submit proposals then instantly see where they ranked against other vendors and based on their bid, vendors were more likely to submit additional bids to improve their ranking.
• Better reporting capabilities—HighRoads provided Hannaford and its consultant with reports on the bids in a standardized format for easier comparison between the proposals. With this information, the consultant would apply market expertise and then make a recommendation to Hannaford.
• Guaranteed transparency and audit trail—To guarantee fairness during the bidding and vendor selection process, HighRoads ensured transparency by providing all vendors with access to the same information during the bidding process. Any objections to the bidding process or the awarding of the contract could be reviewed and resolved using the automatically created audit trail.

"While the market at large has experienced annual double-digit health care rate increases, we've held our trend to half of the national average—while improving our associates' quality of health and outcomes at the same time," said Hayes. "HighRoads has helped us deliver the best possible plans at the right price, while establishing a highly repeatable process for continually driving value to the organization."

About HighRoads

The world's largest employers—such as General Dynamics, Honeywell, IBM, Staples and Boeing—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.

To learn more about HighRoads' Procurement & Renewal Service click here.