How Some Employers Fought for Lower Health Care Prices

A Wall Street Journal piece outlined the successful fight for lower hospital prices by a group of Indiana employers frustrated at their ever-growing health care expenses. Employee health care is one of the biggest, and still growing, expenses for American companies, with the cost now topping $22,000 per year for a family of four. The Employers’ Forum of Indiana successfully advocated for increased transparency and has motivated employer groups around the country to follow suit.

Claims data confirmed employer frustration over costs. Gloria Sachdev, CEO of the Employers’ Forum of Indiana, initiated a study on  health care prices after learning that many employers did not know how much they paid for surgeries or other medical services. This study, which analyzed the employers’ insurance claims data, revealed that Indiana employers paid more than their counterparts in 25 other states.

Employers’ arguments led to Indiana legislation. Legislative leaders in Indiana have said that hearing from employers and reviewing their data motivated them to act. The legislation requires hospitals to post detailed pricing data, like what is required in the HR Policy-supported federal Transparency in Coverage rule.

What’s next? The positive outcome in Indiana has nudged several employer groups across the country to take similar action. Legislators in DC have also introduced several transparency bills aimed at hospital and drug prices. The broad bipartisan support for these bills suggests Congress could be successful in enacting legislation to make it easier for employers to know the prices they pay.