In an October 2025 article, we discussed the changing dynamics between human resources leaders and the C-suite. Rising health care costs are forging a new dialogue and a new directive for benefit programs. In that piece, we provided guidance on how HR departments can shift the way they engage with organizational leaders in this new environment.
But what’s next? How do you take steps to shore up your cost containment strategies while effectively responding to the increasing demands from your chief financial officer and the rest of the C-suite? We posed these questions to the Vanderbilt Health Employer Advisory Council, made up of many of the region’s most innovative and respected companies. Here are 5 strategies that emerged from our discussion.
Strategy 1: Dive Into Data
Dig into your internal data and follow the money. Can you identify provider groups who account for a large portion of your spend? If so, they should be willing to work with you strategically to address cost. Are there high-cost groups within your population that you have struggled to engage? It might be time to try a different approach with them. Is specialty drug spending going through the roof? You might need to find a new solution. Are you investing heavily in primary care and prevention? If so, can you prove that is returning dividends for your population?
Moving forward, HR leaders need to have a firm grasp of data, not only in terms of overall health trends within the population but also economic trends. You must understand what’s driving cost, what levers are working and where challenges lie, whether that's a specific condition, location or program. CFOs are going to approach benefits with a different point of view. It’s important you speak their language and examine your data through their lens.
Strategy 2: Evaluate Everything
Have tough conversations with brokers, consultants, health plan partners and providers. Make sure all the players on your team are thinking strategically and creatively on your behalf and are capable of innovation that leads to positive change for your bottom line. Take a close look at every vendor and determine where you can optimize, renegotiate, replace or discontinue each contract. Apply the same scrutiny to all benefits and programs you offer. In some cases, a valuable benefit may be going unused. Despite it being a good option for the workforce, if there is no engagement, it might be time to sunset it. This even goes to the level of closely reviewing the fees on your register. One of our employer clients saved $1.5 million over the last five years by identifying substance use disorder claims that were outside the bounds of negotiated rates.
Practice this discipline on an annual basis. Typically, employers do a more thorough review of benefits roughly every 3-5 years. In the current environment, with the urgency to control costs, taking a detailed look at all aspects of the benefit program every year provides more opportunities to refine and improve.
Strategy 3: Buy Local
There has been a lot of innovation in care delivery aimed at both improving quality and reducing cost. Much of this innovation has occurred at the local level with solutions built for specific regions. Not all benefit plans tap in to local innovation, which means they miss out on the value being created. Engaging with local providers to learn what options exist in local markets is a great first step to ensure you are maximizing opportunities in specific geographical locations.
In some ways, what’s old is new again. In the early HMO days, people in California had different plan than those who lived in Colorado. The move to a consistent and centralized plan for employees was spurred by the goal of maximizing value by scale. Health care has evolved over the years, and the system can now accommodate a best-in-class approach. At the same time, navigation solutions have matured as well and are on standby to help employers create a consistent experience for employees across the country, while seamlessly plugging in the best local networks to offer the best community-centric care in each of their locations.
Strategy 4: Explore Alternatives
Revisit the idea of narrow networks. Review options for value-based approaches that align all stakeholders. Find new ways to save, such as joining a consortium or coalition to better negotiate specialty drug prices. Collaborate with your consultants and major provider groups to design creative solutions that solve your specific problems. Be bold and place some bets on innovation. Don’t wait for others. It’s time to lead and push the envelope. The status quo isn’t working for anyone.
A recent article from USI calls for employers to take a “smarter approach” and consider value-based and incentivized networks. These alternative network strategies return to the core principles that made early PPOs effective: narrower networks, higher-quality care and aligned incentives. The environment created by this model includes better coordinated care, more personalized care, more proactive management of chronic conditions, a more positive experience for employees and lower costs for both the individual and the organization.
Strategy 5: Prepare for Disruption
Some of the changes required to better contain costs and effectively address rising costs will require some level of disruption for your workforce. Whether shifting to a narrow network, discontinuing some programs or adjusting other elements of your strategy, your decisions will lead to disruption. Instead of avoiding this truth, lean in. Communication will go a long way. Executives and HR leaders should jointly deliver the message that the cost of health care is forcing difficult decisions for the company. Make it clear the organization is juggling multiple priorities: investing in the company’s future to keep it successful and competitive, increasing compensation for employees and maintaining valuable benefits to support the workforce.
Then provide the important context that some changes, and potentially some level of disruption, are needed to ensure that all three of these priorities can be accomplished. If no meaningful improvements are made to health care costs, one or more of those priorities will be negatively impacted. With this approach, employees can at least understand why changes are being made, which will help reduce friction and abrasion from new strategies.
Is your organization struggling to combat rising health care costs? The Vanderbilt Health Employer Solutions team is here to help you navigate these uncertain times. We would welcome an opportunity to collaborate with your organization and discuss how our total health portfolio of solutions can ensure you’re getting the best of Vanderbilt. Contact our team today at employersolutions@vumc.org or (615) 421–0112.