A big-business coalition is using hospital, insurer and employer healthcare cost information to help companies negotiate the price of services and coverage for employees.
The Purchaser Business Group on Health will combine healthcare price transparency data and other information from providers and insurers with claims data from five large employers to analyze the cost and quality of care across 10 markets, the group said in a Wednesday news release.
Related: New pricing data fuel employer lawsuits against Aetna
“We are developing a new level of transparency and analysis that does not currently exist for the commercial market,” PBGH Chief Operating Officer Won Andersen said in the news release. “The project represents a pivotal step toward enhancing transparency and accountability in healthcare spending and purchasing.”
Self-funded employers could use the information to analyze their provider networks, insurance contracts and agreements with hospitals, according to PBGH. Companies could also use the tool to uphold their legal obligation under the Employee Retirement Income Security Act of 1974 to serve as prudent fiduciaries, the news release said.
PBGH is a coalition of 40 large employers, such as Walmart, Microsoft and Salesforce, that collectively spend $350 billion annually on health benefits for 21 million workers. The group did not say when the tool will be released, which quality metrics it would use and on which employer claims it would rely. PBGH did not immediately respond to an interview request.
The initiative comes as healthcare costs for the more than 153 million people with job-based coverage – over 45% of the U.S. population – continue to rise.
Companies project a 7.8% rise in healthcare costs this year — the largest surge in more than a decade — fueled by increasing demand for high-cost medications, such as glucagon-like peptide-1 agonists, cell and gene therapy treatments and innovations in cancer care, according to an August report by PBGH.
Businesses also face mounting legal pressure to bend the cost curve. In 2023, companies were required to attest to the federal government for the first time that they held a firm understanding of their healthcare expenses and acted as prudent fiduciaries on behalf of their workers. They must make this pledge annually.
Several employers claimed that they were unable to uphold the responsibility because insurance companies, pharmacy benefit managers and brokers would not divulge their workers' claims data. Insurance companies such as CVS Health’s Aetna, Elevance Health and Anthem Blue Cross and Blue Shield Virginia have faced high-profile lawsuits from employer customers over the matter. Payers have said they are complying with the law by giving employers information on their total healthcare spend.
The new regulation has driven some employers to court to defend their benefits. A former employee sued Johnson & Johnson last February, alleging the drugmaker failed to ensure workers' drug prices were reasonable.
