Employers Can Now Take Harder Look at Healthcare Cost

Companies should use greater price transparency to challenge excessive charges and make healthcare more affordable. American employers know that healthcare costs have become staggering. A 2024 estimate put U.S. corporate health benefits spending at roughly $1.3 trillion. American workers are feeling the pinch of rising costs now more than ever, and they need employers to make every healthcare dollar count. Rather than simply shifting more of the financial burden onto employee paychecks, employers have a fiduciary responsibility to scrutinize that spending. The State Financial Officers Foundation (SFOF) and the Health Transformation Alliance (HTA) recently unveiled the free Corporate Health Plan Fiduciary Scorecard to help employers use pricing data to identify unnecessary healthcare spending. This self-administered assessment helps companies identify gaps in their oversight and where to focus their efforts. The goal is to reduce unnecessary spending, make healthcare more affordable for workers and their families, and deliver greater value to investors, including state and local government pension funds. The scorecard builds on President Trump’s February 2025 executive order for greater healthcare transparency, followed by his administration’s October 5 announcement of new rules to carry it out. The order directed federal agencies to require actual prices rather than estimates, make pricing information easier to compare and strengthen enforcement. The new rules give employers a stronger basis for identifying discrepancies, challenging excessive charges and negotiating better terms. Price transparency gives employers the information they need to scrutinize their healthcare spending, but it only pays off when they act on the data. Employers can start by figuring out exactly what they are paying and ensuring those charges match their contracts. Comparing negotiated rates with actual claims payments can reveal overpayments and show where further investigation is needed. The scorecard helps employers assess their oversight and identify where a more rigorous review is needed. Their answers should guide what they do next, whether that means securing missing records, arranging an independent audit or checking vendor fees. Employers have already shown what they can accomplish by putting their data to work. A cooperative of large employers reported $1 billion in healthcare savings through efforts that included pooling claims data and negotiating better terms with carriers and providers. That experience shows how other companies could cut costs by reviewing their spending and using their purchasing power to negotiate better terms. Making healthcare more affordable should go hand in hand with providing safe, reliable care. HTA, The Leapfrog Group, and Turquoise Health have recognized 472 hospitals that earned top marks for both patient safety and price transparency. Clear pricing helps employers compare what they pay alongside the quality of care that employees receive. Employers should consider both when deciding where their healthcare dollars go. That same focus on what companies pay and what employees receive has also driven state financial officers to press for closer scrutiny of healthcare spending. Last December, 17 state financial officers asked all Fortune 500 companies to examine their healthcare payments, control costs and protect shareholder value. Their letter also called on companies to examine restrictions on access to claims data and independent audits. It also asked employers to describe audits they had already conducted and explain how they planned to use pricing and claims data to identify billing irregularities, overpayments, and inefficiencies. HTA brings experience purchasing healthcare for employees, while SFOF represents state financial officers overseeing public funds invested in those companies. Both share an interest in making sure health plan spending is justified and serves the people who depend on it. Unnecessary healthcare spending erodes shareholder value, putting pressure on the pension investments supporting retirement income for teachers, police officers, first responders, and other public employees. Chief executives and boards should use the assessment to identify what needs to change, make clear who is responsible, and follow through. A system in which no one knows what healthcare costs is not working for companies or their employees. Investors deserve to know how companies are managing a major expense. Workers deserve healthcare they can afford. The next contract renewal or payment audit is a chance for corporate leaders to lower costs for their companies and make healthcare more affordable for employees. OJ Oleka is CEO of the State Financial Officers Foundation (SFOF). Rob Andrews is CEO of the Health Transformation Alliance (HTA).