CONTRACT & VENDOR MANAGEMENT FOR HEALTHCARE INSURANCE PROVIDER

  • Leader of comprehensive medical insurance and mini-med plans with 95% of total individual market in North Carolina
  • 4,700+ employees
  • 3.89M customers
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Business Need

Ability to measure vendor progress or action against their managed services contract for the Testing & Quality office, including 150 Vendor Testing Associates and 25 Client Associates

Simplify contract (now $175M over 5 years) and reduce annual spend over time with single vendor

Higher percentage of testing functions to be automated

Challenge

Over 6 different vendors utilized throughout entire organization

Out-of-control vendor spend with no direct value

Compliance gaps in current Service Level Agreements (SLA’s)

Vendor was seen as providing little thought leadership to customer and a high cost staff augmentation provider

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Solution & Results

Negotiated and drafted new Master Service Agreement; total value to client ~$33.4M

– Paradigm acted as liaison between client and vendor to renegotiate set results for future contract

New set of SLA’s and KPI’s to support continuous improvement

– Decreased Effective Rate from $39 to $36/hour for Managed Capacity

– Price reductions of $1/hour annum for Managed Capacity projects

– Reduced demand planning from 6 to 3 months

$16M+ in negotiated savings over 5-year agreement

Transitioned client from Staff Augmentation to Thought Leadership model