Benchmarking is a Metric, Not a Strategy

Benchmarking is useful, but it is not a strategy.

I see this all the time: A company benchmarks their health plan, their broker tells them they are “right in line with the market,” and for a moment, that feels good. It’s a relief to be average—until the renewal hits and nothing has changed.

The problem is that benchmarking tells you where you are, but it doesn’t tell you why you’re there or what to do next. If you are looking for actual results, you have to realize that averages don’t solve business problems:

From a CFO standpoint: Averages don’t control costs.

From the HR standpoint: Averages don’t clear up employee confusion.

From the Owner’s standpoint: Averages don’t create control; they just create a temporary sense of comfort.

Most health plans don’t go sideways because they are “below average.” They go sideways because of a few key drivers: how the plan is being used, where care is actually happening, and the specific factors hidden behind the claims.

The real shift in managing your benefits is moving from comparison to clarity.

If you want to move beyond the comfort of the benchmark and start finding real solutions, you have to ask yourself: Do you actually know what is driving your costs, or do you just know how you compare to the company down the street?

If you want help finding that clarity, I’m always happy to be a resource.