March 18, 2025

Introduction

The untenable high cost of health care in the U.S. and around the world has driven employers to meticulously assess the impact of health and well-being offerings. Business Group on Health believes that transparency in health care pricing, quality and contracting is fundamental to controlling costs, improving care and empowering patients. To measure the effectiveness of their programs, employers need greater visibility into outcomes and experience data, in addition to information on price and quality.

State and federal policymakers in the U.S. are in part facilitating this change by enacting regulatory and legislative requirements for greater price transparency of health care services and the pharmacy supply chain. While in concept, greater transparency is embraced by employers and employees alike, the practical application is complex and multifaceted, involving all stakeholders in the employer health ecosystem. This viewpoint details the areas that have the potential for greater transparency - and how employers can take action.

U.S. Policy Aimed at Transparency Widens Access to Pricing Information

When it comes to visibility into the pricing of health care services in the U.S., both employers and employees have greater access to this information than they did even a few years ago. Recent progress was driven by two key changes: 1) Final Transparency in Coverage (TiC) rules that required additional disclosures and the submission of three machine-readable files regarding in-network and out-of-network payment rates and pharmacy information; and 2) the Consolidated Appropriations Act, 2021, (CAA ’21) that required additional transparency from brokers and consultants, and regarding pharmaceuticals to employer plan sponsors and the government.

These regulatory and statutory requirements, while moving in the right direction, have been a mixed bag for employer plan sponsors. The technical process and file standards are administratively burdensome and have not yet yielded consistent, actionable data for employer plan sponsors or consumers. Thus far, the requirements have failed to reach their ultimate goal of reducing health care costs for consumers and employers. In focusing on price data alone, these requirements leave out a critical part of the equation: quality. Separately, open questions remain about compliance rates and usability of other transparency requirements on hospitals and how those may or are supposed to be contributing to overall transparency efforts.

It is expected that U.S. policymakers will continue to look for additional legislative and regulatory provisions aimed at transparency. For example, in February 2025, an Executive Order on Transparency was issued to build on the TiC rules and the CAA ’21. The order pushes federal action to go further with existing reporting to require actual price of health care items and services, not estimates, and suggests rigorous enforcement of reporting requirements. While additional guidance and requirements will hopefully contribute to more consistent and usable data for employers, there is the potential for added costs and increasing administration burden for employers, their group health plans and insurance carriers/third-party administrators (carriers/TPAs).

Both Cost and Quality Information are Needed to Achieve Value in Health Care

Access to user-friendly quality and cost information is required to support patients who seek to identify and select high-value providers. To do this most effectively, employers need carriers/TPAs, PBMs and other solution providers to translate this quality and cost information into an easy-to-navigate user experience for those plan participants inclined to pursue such information. Employers, too, need this type of information to enable better oversight and management of their health plan investments and to curate high-value networks for participants. Value-based purchasing efforts are made possible by price and quality information – to hold health care providers accountable and enable health plans to design high-performance networks.

This need for clarity extends to all vendors that address employee health needs. Specialized solutions often focus on a specific condition. They seek to fill gaps left by lack of community providers and should be part of any employer’s approach to value-based care. Employers need data to accurately evaluate their solutions’ performance and adjudicate guarantees, often from an independent, third-party entity, to ensure that these offerings meet quality standards.

Employers’ Full Visibility to Program Terms and Data Necessary to Inform Decision-Making

Employers have long voiced the need to have greater visibility into how their investments in employee health and well-being translate into positive outcomes. Absent that transparency, employers lack critical decision-making information.

There are ample instances of challenges caused by the lack of transparency:

• Limited visibility into unfavorable contracting terms with vendors and their subcontractors, supply chain or related entities;
• Delayed, incomplete and/or unusable financial transaction data;
• Shrouded view of the “spread” between an employer health plan’s claim costs and the carrier/TPA or PBM’s true cost;
• Inaccurate or incomplete description of the specific terms of pharmacy rebate arrangements between the manufacturer, the rebate aggregator, the PBM and the employer;
• Unclear and/or inappropriately biased formula for how savings are calculated under a shared savings model;
• Limited disclosure of when and how consulting, brokerage and other firms receive performance payments or other direct and indirect compensation in exchange for selling services, making referrals, or otherwise, based on their engagement with an employer health plan;
• Absence of an independently verified analysis of specialized solutions’ outcomes to determine what works – and what doesn’t; and
• Limited release of cost driver information under insurance contracts globally, making renewal negotiations difficult.

The list of complexities is vast and illustrates how vital transparency of health care purchasing arrangements is. In fact, nearly all employers (97%) say that transparency is very important/important in assessing carrier/TPA and PBM partnerships. Employers have a right to know how their dollars are being spent – and if their investment is having a positive impact on employee health.

Conclusion

As transparency accelerates, employers have the opportunity to advance how they and their employees use data to make informed decisions. However, they cannot do it alone. Carriers/TPAs, hospitals, PBMs, consultant/brokers and specialty solutions need to be held to a high standard when it comes to providing access to timely, understandable and integrated data. The Business Group will continue to promote transparency in health care through its robust working relationships with employers, health industry partners and policymakers.

Related Resources

• Taking Action on Value: A Business Group on Health Viewpoint
• Transparency Policy Position
• Podcast: The Power of Transparency to Transform Patient Safety
• Promoting Competition and Innovation in Health Care Policy Position Statement
• Leveraging Workforce Data for Health and Well-being Success: Guidance for Employers
• Utilizing Financing Mechanisms to Implement a Global Consistency Strategy
• Business Group on Health Submits Statement on Price Transparency and Pharmacy Benefit Manager Reforms
• Holding Vendors Accountable for Results and Assessing the Impact of Program Interventions

More Topics

Resource Vendor Management & Accountability Transparency