Pitney Bowes has been frequently mentioned as among models of “Value-Based Benefit Design” with respect to health care benefits.  In the most recent book by its Medical Director and VP Strategic Initiatives, an approach to spreading VBBD to other firms was briefly described. [J. Mahoney & D. Hom BeneFIT Design: Seven Steps to Value-Based Health Decisions GlaxoSmithKline 2007] Its logic follows the example of Wal-Mart, which has for years worked with its suppliers to help them reduce operating costs and improve efficiency, in order to reduce their prices to Wal-Mart, while still remaining profitable.

The same kind of “reverse marketing” can be used in VBBD, i.e. working with suppliers, and even distributors, with everyone in a firm’s value chain, to promote their achieving the cost savings and overall performance benefits of VBBD, themselves, and passing on some of this value to the firm that enables them to do so.   One obvious example would be for a firm to work with local hospitals and health plans to reduce their own costs through VBBD, and pass along some portion of cost reductions achieved to the firm, plus any other of their loyal customers they choose.

Beyond VBBD, there is the same potential for working with value-chain partners on reducing their costs and improving their performance through employee health management and other approaches to improving employee performance.  Any firm that masters the full armamentarium of proven ways to improve workforce performance, including health improvement, employee training and development, pay-for-performance, and making work meaningful, would be wise to share its own experience and expertise with such partners.

This would clearly increase the risk that any proprietary secrets shared with partners might end up in the hands of competitors, though this can either be accepted as a natural business risk, or can be controlled via confidentiality agreements with value chain partners.  But since the value to the firm includes dramatic reductions in partners’ costs and improvements in their performance, it can be a risk worth taking.  Firms that master VBBD and employee health management can certainly gain a major “disruptive innovation” advantage, at least for a while, by empowering the other members of its value chain to improve the value they deliver, to the firm, and to its customers.