As a midsize employer, you’ve been told that your health plan is “best in class” and that your vendors are the best for the job. But if your costs keep rising and your outcomes aren’t improving, then either your needs are misunderstood or someone’s grading their own homework.
The truth is, most vendor reviews aren’t actually reviews at all – they’re just renewals. The same spreadsheet, the same projected savings, the same vendor that’s been underdelivering for years, just with a new fresh logo and some new buzzwords. But procurement isn’t evaluation – procurement is about pricing, while evaluation is about alignment. And if you skip alignment, your health plan supply chain breaks down fast.
That’s why you need a better process, one that puts you in control before you sign another contract. In this article, I’m going to give you the exact blueprint that we use with clients to evaluate vendors before renewal season hits. We’ll cover the five categories that we score every vendor on, how to separate vendor margin from vendor value, and how to build a true scorecard process that keeps everyone honest.
The 5 Buckets to Evaluate Every Vendor
Every vendor in your health plan ecosystem – your TPA, PBM, stop-loss, even your network – should be evaluated across these five key buckets:
- Services and Capabilities: What do they actually do, and how well do they do it? Can they handle your complexity, custom plan design, or regulatory requirements? This bucket exposes whether the vendor is built for an employer like you, or just repackaging the same product for everyone.
- Pricing and Transparency: What’s their compensation model? Is it fee-based, PEPM, shared savings, or just smoke and mirrors? You’re going to want to look for hidden margins, pass-through guarantees, and clauses buried in amendments. If it’s not transparent, it’s not trustworthy.
- Technology and Reporting: Do they give you real-time access to claims data? Are their reports actionable or just pretty PDFs that tell you nothing? The right vendor arms you with insight, while the wrong one keeps you blind.
- Implementation and Support: Onboarding sets the tone. Do they offer a dedicated account manager? Are escalations handled quickly or do they ping-pong between departments? Support isn’t fluff – it’s where trust is built or broken.
- Flexibility and Compliance: Is their platform customizable? Can they pivot mid-plan year if your business changes? And how seriously do they take ERISA, HIPAA, and ACA compliance? Too rigid, and you’ll run into problems. Too loose, and you’ll run into liabilities.
When you score every vendor against these five buckets, you stop buying on price and you start buying on performance. And that’s how you win the game.
Building a Scorecard Process That Keeps Everyone Honest
Knowing what to evaluate is one thing, but how you run the process is where most employers slip. Here’s the blueprint that we use with clients to build a real-world, actionable scorecard process:
Step 1: Score the Vendor Before Renewal Season
Don’t wait until your broker sends a spreadsheet 30 days before the deadline. Start early. Get your contracts, request data, ask the tough questions, and don’t let them self-score. You own the evaluation.
Step 2: Use a Consistent Rubric
Every vendor gets scored across the same five buckets. Rate each one one to five, add comments, and flag risks. This turns your gut feeling into a strategic decision.
Step 3: Use the Results to Drive Action
This isn’t a formality – it’s literally fuel for your next move. It’s helping you build your strategy. A vendor with strong scores, keep them and keep them accountable. A vendor with average scores, push for changes before you renew. A vendor with poor scores, start replacement conversations now while you still have time to implement.
This scorecard creates leverage before contracts are signed, not after the damage is done. And here’s the real trick: use this scorecard across TPAs, PBMs, even stop-loss carriers and underwriters. No one’s above the process. When everyone knows they’re being evaluated, they show up differently.
What to Do When a Vendor Fails Your Evaluation
Most employers will freeze when a vendor fails their evaluation. They feel stuck or afraid of disruption. But here’s the truth: it’s riskier to keep a misaligned vendor than it is to replace one. So, here’s what to watch out for:
Red Flag #1: Vague or Delayed Responses
If a vendor dodges questions or drags their feet on data access, they’re hiding something. Period.
Red Flag #2: “Don’t Worry, We’ve Got It Handled”
Any vendor that resists transparency is betting on your complacency. You don’t need reassurance, you need receipts.
Red Flag #3: Misaligned Incentives
If the vendor makes more when your claims go up or gets paid more when they deny care, you’ve got a structural problem, not a performance one. In this case, you want to start the replacement process early.
Use the vendor scorecard to engage new vendors, not just based on price, but on alignment. Negotiate from a position of strength, not desperation. Because here’s the bottom line: evaluating vendors isn’t just about switching. It’s about setting a new standard for how you manage your health plan.
Take Back Control of Your Health Plan
You don’t have to wait until renewal to formulate a strategy, and you don’t have to gamble on the same players suddenly coming up with a new solution. Today, I’ve given you the exact blueprint that we use with our clients to evaluate vendors, from the five core strategies to the red flags and the scorecard process that put you back in control.
If you want help applying this to your own plan, or you just want a second set of eyes on your current vendor stack, book a call and we’ll walk through it with you. And if you just want to get your hands on a scorecard, download our free Mid-Year Health Plan Review Checklist – it includes the exact scorecard that we use with our clients.
We’ll help you identify the gaps, build leverage, and clean up your vendor relationships before renewal season hits. Don’t let another renewal sneak up on you. Audit before they invoice.
At BeneSmart, we help midsize companies stop the overspend and start building health plans that actually work for their people and their bottom line. If this article was helpful, be sure to check out the full 9-Step Blueprint on our YouTube channel.
Your Next MOVE….
Ready to take control of your health plan? Here are a few key resources to help you get started:
- Book a call to learn how BeneSmart’s Benefit Cost Containment Blueprint can help you roll back your costs.
- Check out the 9 Steps of the Benefit Cost Containment Blueprint in our video series.
- Download BeneSmart’s free Mid-Year Health Plan Review Checklist to assess your current setup.