The Problem with Managing Multiple Vendors

Is managing multiple vendors slowing your health plan down? Disconnected systems, rising costs, and scattered data often stand in the way of efficiency and better member experiences.  

This episode explores the challenge of managing multiple vendors and how health plans can escape this antiquated operating model to simplify operations, cut costs, and gain real-time visibility across business functions. Listen to discover how to drive lasting operational excellence with a single, accountable partner. 

Host: Welcome to Current Trends for Payers, the podcast where we explore the biggest challenges and innovations shaping the healthcare payer industry. In today’s episode, we’re looking at an issue that many health plans struggle with: managing multiple vendors. What starts out as a desire to find the best solutions for each area of the business can quickly turn into a complex web of systems, contracts, and inefficiencies.

Joining me today is Sean Cattie. Sean has deep expertise as a healthcare technology executive focusing on BPaaS delivery models. Sean leads client delivery teams responsible for technical capabilities, implementation governance, automation and configuration across enterprise operations. Sean, thanks for joining us.

Sean: Thanks for having me. This is a topic I’m passionate about because I’ve seen the impact that fragmented systems, multiple vendors, and a lack of a single accountable partner can have on health plans, both operationally and financially.

Host: A lot of health plans use multiple vendors for areas like claims, enrollment, billing, customer service, risk adjustment, member portals, and more. On the surface, it seems logical to find a vendor partner for each function, but what’s the downside to this approach?

Sean: You’re right, it sounds logical at first. The problem is that as these systems grow, so does the complexity of managing them. Each vendor comes with its own platform, its own contracts, service agreements, and support models. That adds layers of coordination just to keep the business running smoothly. When data lives in different systems that don’t communicate well, you start to see operational silos, latency, and errors occur. In my experience, I’ve seen health plans spend an incredible amount of time just trying to reconcile information across vendors. We see member and provider data not matching in claims, care management systems that can’t access real-time eligibility, or call center agents who can’t see updated member information because of integration lags. It becomes a daily challenge to keep things in sync.

Host: That sounds very inefficient.

Sean: It definitely is. Maintaining all those vendor relationships and coordinating integrations across platforms adds cost and complexity to manage. It’s really about how the organization operates. When the health plan has to manage multiple vendors, it can unintentionally create barriers between teams if they’re all working in different systems with their own mission. Consider if billing, claims, IT, and customer service   are all operating out of different systems and multiple points of accountability. The result is limited visibility of overall operations across the health plan. Data becomes scattered, and decision-makers don’t have real-time insight across the organization. There’s no connective tissue binding the different areas of the health plan’s operations together.  

Host: So, what’s the alternative?

Sean: The idea is to simplify. What if all the vendor technologies were integrated and managed by a single, accountable partner? Now, you’ve got data connectivity between systems, siloes are removed, and if all of the technology is managed by one organization that has accountability for the platform and the partners, that enables a true ecosystem to come together under the same operational goal.

Host: That makes sense. So, instead of just deploying individual software, it’s a holistic approach that enables operational improvements across the entire health plan.

Sean: Exactly. One of the biggest mistakes the industry made in the past was building systems that were designed to go live but not endure over time. In our model, every aspect is designed for long-term reliability and adaptability that evolves as regulations change, as new lines of business come online, or as technology advances. When all of this is managed by one partner, it frees the health plans from managing multiple vendors. So, the technology ecosystem is managed by one vendor partner. Let’s take the concept a step further. Now, imagine that this one, accountable partner manages the technology ecosystem, but they also manage the people and the processes, and guarantee business outcomes in the SLA. This is a full BPaaS model for ecosystem management and operational management. I believe this is the new gold standard for health plan operations. It enhances efficiency and reduces operating costs.

Host: This isn’t really being done, so I can see how this will set a new bar for health plan operations. Because it’s not just the technology: it supplies the entire health plan’s operations with trained people, process, and platform.

Sean: That’s right. You know there’s a lot of confusion in the industry about the term BPaaS. When we talk about business process as a service, we are talking about building an operational ecosystem that improves outcomes for members and providers in our health plans. We design and improve the solution based on feedback from multiple health plans, across various lines of business, and across different geographies, which enables the system to grow, evolve, and continue to deliver the desired business outcomes. It goes far beyond just deploying software, it’s about operational improvement over time.  As we work closely with our internal BPaaS partners, we’re getting direct feedback not just from one data point but from multiple health plan views about how things should operate. So, we can bring to the market, not just a point solution for each customer, but a holistic enterprise solution for all health plans that is constantly updating, evolving, and can scale up or down with ease.  

Host: Can you share an example from your own experience that illustrates how this operational shift works?

Sean: Sure. I worked with a regional health plan that had over 10 different vendors just to manage core operations. One for claims, one for member enrollment, another for care management, a separate CRM for customer service, you get the picture. Their IT team spent most of its time just maintaining interfaces between systems. After repeated delays in resolving data discrepancies, the plan decided to take a step back and evaluate how to simplify. We helped them transition to a unified BPaaS model, consolidating operations under a single ecosystem. The implementation timeline was under a year. And the results were well worth it. They had a 30% reduction in overhead costs, 90% reduction in claims backlogs, 50% reduction in call handling time, and 25% membership growth. Data accuracy across departments improved. But what stood out most was how empowered their teams felt. They could see the entire member journey in one place and make better decisions in near-real-time.  

Host: That must have been a big shift culturally as well as technically.

Sean: It was. And I think that’s an important point. Technology alone doesn’t solve the problem. It’s about designing systems and processes that empower people to work smarter.  When systems are integrated, employees spend less time chasing data and more time adding value, whether that’s resolving member issues faster or improving care coordination.

Host: You mentioned that the ecosystem is very adaptable. Can you explain the technology and what makes it so adaptable?

Sean: We start every implementation with a configure-vs.-custom approach. We have selected strategic partners that provide wrap-around services for our ecosystem. Using the prebuilt integrations from our partners as accelerators in combination with our utilization of ETL tools that extract, transform, and load data, we create the connective tissue lacking in most health plans. These capabilities allow us to adjust quickly to regulatory requirements, business conditions, and member needs. It shifts the difference from being reactive to proactive. Integrations are just part of the story. We also have a data hub at the core of the ecosystem. This means there is a bidirectional data connection among all of the systems, like claims processing, member enrollment, billing, customer service, and Risk and Quality. It’s all consolidated into the data hub.  

Host: And it sounds like that also helps maintain consistency and scalability.

Sean: Exactly. Once you build a system this way, you can implement it multiple times across different clients or business units. For example, if we implement an enhancement or identify a defect, instead of fixing it for each individual health plan, we simply flip the switch and implement it across the entire ecosystem of our health plan customers. Some health plans encounter issues with their partners because if they require an enhancement, they have to wait in a queue; it doesn’t matter if the issue has already been resolved for customers A, B, or C. For us, when we fix or enhance something, it deploys across our entire customer base so everyone can benefit from the investment. With the BPaaS model, we build it, we deploy it, and we test it. This reusability saves time and ensures that every implementation benefits from the refinements made in the previous one. It’s how we continuously improve efficiency and reliability across the ecosystem.

Another advantage is that we have subject matter experts managing the ecosystem for various BPaaS clients. This gives us an advantage because we have firsthand knowledge of how the business operates, allowing us to collaborate effectively with product development.  

Host: Thank you for that explanation. Now, those figures you provided, indicating about a 30% savings, that makes a lot of sense. Those efficiencies benefit the health plan. Let’s talk about the bigger picture for a moment. We’ve seen Deloitte and other analysts talk about the industry’s move toward platform-enabled ecosystems. How does that trend align with what you’re seeing day-to-day?

Sean: It’s completely aligned. The industry is recognizing that static, siloed systems can no longer keep up.  Health plans are expected to manage more data, more compliance requirements, and more member touch points than ever. A platform-enabled ecosystem gives them the agility to evolve as the market evolves. McKinsey has found that organizations that adopt automation and advanced technology across their operations can achieve efficiency gains of up to 50 percent. That’s not hypothetical. We’ve seen similar results when plans consolidate and automate through an integrated ecosystem. It’s about bending the cost curve while improving quality and member experience.

Host: And I’ll bet all of this isn’t lost on the members. Even though the members aren’t saying, I wish my health plan would get a connected ecosystem. I’ll bet they can sense the impact of unified data and efficiency in their care and outreach experience.

Sean: You’re right, members definitely expect certain behaviors because it’s so common in other industries. For example, when I order a pizza, I can track it and know when it's arriving. That information sharing is incredibly important to members. So I can see when my claim will be paid, or whether my ID card is in the mail. Members do feel the difference. You’re right, maybe it’s not always conscious, but they do expect a seamless experience. When systems are disjointed, members feel it.

Host: What advice would you give to health plans that feel stuck managing multiple vendors on their own but are overwhelmed at the idea of changing?

Sean: I’d say start by asking health plans, “What outcome are you trying to achieve?” Is it about reducing cost? Improving efficiency? Enhancing member experience? Once you’re clear on the goals, evaluate how your current vendor ecosystem supports or hinders achieving those goals. Then look for opportunities to consolidate under partners who can handle end-to-end processes, not just individual tasks. The key is sustainability. Build systems that operate efficiently over time, not just at go-live. When you think holistically across business, technology, and operations, you unlock long-term value and stability.  

The short implementation is worth years of ongoing operational savings. Consider how your current total cost of ownership, including vendor upgrades and unexpected costs, is adding up to a price tag you didn’t anticipate when you initially signed the contract. Our ecosystem and BPaaS model can be implemented in as little as 6-9 months, and afterwards, we continue to partner with plans to ensure they get the business outcomes we promise in the SLA. If your health plan doesn’t succeed, we don’t succeed because we have a vested interest in your success. We build your ecosystem to operate it. So, plans should clarify their goals, identify where they want to go, and decide whether their current platform and processes will get the job done.  

Host: That’s a great takeaway. The healthcare industry is complex, but this sounds like a much-needed simplification of operations, allowing plans to focus on what really matters: improving outcomes for their members. Sean, thank you so much for sharing your perspective and experience today.

Sean: Thank you. It was a pleasure to join you.

Host: And thanks to our listeners for tuning in to Current Trends for Payers. Follow on Apple or Spotify and leave us a review!  

References

Deloitte Insights (n.d.). New Business Models In Healthcare: Building Platform Enabled Ecosystems. Deloitte.com. Retrieved November 12, 2025, from https://www.deloitte.com/us/en/insights/industry/health-care/transformed-health-care-ecosystems.html

McKinsey and Company (n.d.). Technology Operations: A Flywheel For Performance Improvement. Mckinsey.com. Retrieved November 12, 2025, from https://www.mckinsey.com/capabilities/operations/our-insights/technology-operations-a-flywheel-for-performance-improvement