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HighRoads has helped us combat rising health care costs while improving efficiencies. We are completing RFPs faster and reducing fees."
- Mark Snyder, Director of Benefits at Owens Corning

Owens Corning

Owens Corning Combating Rising Health Care Costs with HighRoads HR Control

Overview

Owens Corning (NYSE: OC) is a leading global producer of residential and commercial building materials, glass fiber reinforcements and engineered materials for composite systems. A Fortune 500 company for 54 consecutive years, Owens Corning is committed to driving sustainability through delivering solutions, transforming markets and enhancing lives. Founded in 1938, Owens Corning is a market-leading innovator of glass fiber technology with sales of $5 billion in 2007 and 18,000 employees in 26 countries on five continents.

Business Challenge

Owens Corning was faced with bankruptcy after a multibillion dollar asbestos liability suit and declining sales. The Ohio based company knew they had to become more strategically aligned with their business initiatives and begin to implement ways to improve data accuracy and reduce health care costs.

Having make some aggressive moves to attract and retain its best employees, reduce the cost of their health care spend, and gain control of their vendor relationships – Owens Corning actively encouraged their employees to think and act differently about their health care decisions. To assist in this behavior, Owens Corning initiated a Consumer Driven Health Plan (CDHP).

Prior to HighRoads, Owens Corning didn't have enough resources to follow up with the vendors - and when they were able to get the vendors to respond – the information was delivered at different times, in different formats. The staff had to manually sort through them to identify agreed upon metrics. To shorten and streamline the procurement process, maintain a centralized database for all their benefits related documents and gain control of their health care vendor performance – Owens Corning looked to HighRoads for help.

"Integrated information solutions empower the benefit management process – saving money and freeing staff for more strategic activities" said Mark Snyder, Director of Benefits at Owens Corning.

The HighRoads HR Control Solution

To tackle its mounting health care crisis, Owens Corning turned to HighRoads' Procurement and Vendor Management Service, components 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.

The Procurement Service provided Owens Corning with a real-time, on-line environment, with visibility into the procurement and negotiation of the CDHP plan. By having flexible capabilities, Owens Corning was able to collect and analyze both qualitative and quantitative data.

The Vendor Management Service enabled them to play an active role in monitoring their HR vendors' performance and adherence to negotiated performance guarantees. Virtually all companies have negotiated performance guarantees with associated fees at risk, and they want to keep a more watchful eye on vendor performance. However, very few employers have the time, resources, or money to properly manage their vendors. HighRoads Vendor Management Service enabled Owens Corning to proactively monitor their vendor performance, with an automated process requiring minimal resources. With this process, they are able be proactive rather than reactive.

Owens Corning is able to view the overall status of its projects on the HighRoads HR Control dashboard, which provides a quick, graphical view of the project's progress. Using the HR Control dashboard to manage its vendors, benefits contracts and RFP processes, Owens Corning has derived negotiating leverage by incorporating specific performance metrics for each vendor. This level of detailed visibility ensures that vendors are performing to contracted agreements and also makes sure that Owens Corning has the automated reporting and meaningful metrics they require when they launch into new contract negotiations.

Results

By utilizing HighRoads HR Control Suite of services and careful management of their employee benefits programs, Owens Corning was able to realize significant cost savings. In 2004, Owens Corning's health care benefits costs decreased by more than 15% versus the national trend of an 8-9% increase. They received these results by:

• Reduced administrative costs – HighRoads automated a number of administrative tasks. This includes the distribution of RFPs, collation and analysis of results, and administration of renewals. Just in the CDHP RFP, Owens Corning saw the following results:
  • A reduction in ASO fees of 6.5% (from initial bid to final bid)
  • An average of 3 bids from participating vendors
  • A significant reduction in time required to evaluate proposals
• Improved analysis and review – Because HighRoads automated the gathering and collating of data, staff members were able to spend more time on strategic tasks such as analysis and review of alternate health care plan scenarios.
• Reduced health care costs – HighRoads online service that ranks - on a real-time basis - all of the respondents to an RFP according to the competitiveness of their bids, enhanced vendor competitiveness and lowered the cost of benefits. Improved automation, combined with the competitive bid feature enabled the company to complete more RFPs per year with only minimal administrative costs, which further reduced health care costs.
• Improved data usage – HighRoads created a data repository, in which all of the data on the company's various benefits plans was stored, and from which data could be queried and custom reports generated. Because this is both centralized and electronic, it is now far easier and less costly for HR employees to answer questions or perform analyses of vendor performance. As a result, overhead is lower, and the department is able to comply with requirements of auditors and regulators.

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 please click here.

To learn more about HighRoads Vendor & Contract Service please click here.