Care Plus New Jersey Inc. felt it was time for some radical surgery. The non-profit provider of behavioral healthcare wanted to cut out its IT department from its HR function.
The healthcare company had outsourced its payroll to ADP. But its supplier required Care Plus to have ADP applications on the company computers and retain IT staff for its payroll work. "I wanted to get out of the IT part," says Dave Ofshinsky, CFO and VP of Administrative Services for Care Plus.
A salesperson from CheckPoint HR made a cold call while Ofshinsky was in this IT pain. "Making the decision to switch suppliers was simple," says the CFO. No more IT!
Excising IT allows Care Plus to cut costs, which is crucial for its survival. "Healthcare payers are always looking for ways to not pay us," reports Ofshinsky. "We are always in their cross hairs."
At the same time, Care Plus faces another (albeit positive) pressure: it is growing geographically. Outsourcing its HR and HR IT means it "doesn't have to worry about setting up T-1 lines or IT infrastructure in our new offices," notes the CFO. "This allows us to move more rapidly into new areas," he adds, addressing one of the company's important strategic goals.
Outsourcing's Many Benefits
Care Plus selected CheckPoint HR because it is a managed service provider (MSP), a supplier that is an administrative service organization that hosts a Web-based application which takes control of the business processes.
"We realized an MSP could help us in other areas besides payroll," says Ofshinsky.
Michael Bock, Partner, CheckPoint HR, says the company's goal "is to streamline HR, payroll, and benefits" for its buyers. That's what it did for Care Plus, points out Ofshinsky.
In addition to cutting out the IT applications, CheckPoint HR allows the Care Plus staff to work from anywhere. Ofshinsky says being able to access data from home has been "a real plus."
The Wilshire Group, a wholly-owned subsidiary of CheckPoint HR, also provides group health benefits. One of its first tasks was to search the market for a better and more cost-effective benefit plan for Care Plus's employees.
Ofshinsky says in the first year he will save "at least $180,000 on employee benefits." (The company's annual revenues last year were $21 million.) What's more, his company saved 50 percent on its payroll services and received 100 percent more in HR support.
Ofshinsky, who has had success with self-funded plans at other companies, was determined to repeat the success and savings self-funding offered when he switched outsourcing suppliers. "The cost savings of a self-funded plan can be eye-opening," says Bock.
Lisa Rowan, Program Manager for Human Resources and Talent Management Services for IDC, says the cost of employee benefits "is the single biggest issue facing small businesses today" because they don't have the size to shop around for the best buys. Outsourcing benefits to a company like CheckPoint allows them to offer benefits commensurate with the big boys.
Being able to do that "is a big deal," according to Rowan, because top benefits help small companies attract and retain top talent. She points out the current US nurses shortage. Adds Todd Hintze, Principal, Healthcare, Everest Group, "There's a war on talent for small healthcare providers. Offering industry-competitive benefits is one way to win the war."
Recruiting, Report, Self-Serve Are All Included
Care Plus wanted to institute an employee self-serve Web site, but it was too expensive an option at ADP. But it was an affordable option from the MSP. "Our buyers say our affordable self-serve platform is the highlight of our offering," reports Bock.
Recruiting is included in CheckPoint HR's fee. So are employee background checks. Care Plus previously had outsourced both processes. "We consolidated these functions because we selected a supplier who could do it all at less cost," says Ofshinsky.
Reporting is care free. When Care Plus had to have the supplier's software on its computers, it had to employ a programmer to retrieve some necessary data. When it chose to eliminate that position, it had to request specific reports, which the supplier gladly provided for a fee. There were times the CFO says even he couldn't decipher the numbers on these reports.
After switching to the MSP, Ofshinsky says he easily printed a payroll report after the first payroll run. "I ran a report without being trained," the healthcare executive marvels. "Cost-wise, we couldn't touch this kind of capacity on our own," he says.
CheckPoint HR has integrated HR content into its offering. "Business & Legal Reports," for example, detail HR compliance "to keep our buyers out of harm's way," says Bock. The Web-based system allows buyers to email a question and receive a response from a labor attorney within a 24-hour business period.
"HR Wizards" include a model employee handbook and performance review forms. ELearning classes discuss sexual harassment and interview techniques. "These are part of our base service, not add-ons," says the CheckPoint HR partner.
CheckPoint HR's Game Plan
CheckPoint HR targets mid-size companies with 50-2,000 employees in the tristate area (New York, New Jersey, and Connecticut) but also has nationwide reach. It zeroes in on companies that are already outsourcing their payrolls. That's a large target market because Bock says 80 percent of the companies in the tristate area do so.
"Most companies this size have a payroll provider and a benefits provider. We can save our buyers money by doing both," he adds.
Lessons from the Outsourcing Journal:
- One of the ways healthcare providers can slash costs is cut their IT departments. Small-to-medium providers can turn to MSPs to handle their IT infrastructure.
- Self-funding benefits programs can produce "eye-opening" savings. Care Plus is saving $180,000 a year and providing its employees better benefits by self-funding. Its annual revenues: $21 million.
- MSPs like CheckPoint HR provide added benefits like online recruiting tools, background checks, easy reporting, employee self-serve platforms, and access to HR legal advice in their all-inclusive offerings.
- The HR supplier targets companies that are already outsourcing payroll because it knows they understand the benefits of this kind of HR outsourcing.