Applying A Marketplace Model To Healthcare Benefits

Imagine a random Tuesday afternoon in late August. While much of corporate America is still in summer vacation mode, hundreds of CFOs and HR leaders are reviewing their pharmacy benefit renewal, a decision that will determine millions in spend for the coming year. The deck is 60 slides long, and it’s challenging to compare alternatives, gain visibility into net cost and see if a better option exists.

Now contrast that with how a CFO or procurement leader sources other business services. Decisions about software, logistics and professional services often happen in environments with transparency and choice. Vendors can be evaluated side by side, pricing is increasingly visible and decisions are often informed by data.

Even as net medicine spending exceeds $600 billion in the U.S., the payers who pick up much of this enormous tab often operate in the dark. I co-founded a pharmacy technology company, and in my view, this isn’t a capability problem. It’s a structural one that’s ripe for a digital marketplace model—an approach that has been transformative for other industries but has barely been applied to the back-office work of employer-sponsored benefits.

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