Take back control: How employers can regain power over healthcare spending

The cost to insure a family of four now exceeds $35,000 per year. That figure has nearly tripled over the past two decades, far outpacing both wages and inflation — and with medical costs rising by roughly 8.5% annually, employers are increasingly left footing the bill. Next year, the cost of health care per employee is expected to climb an average 6.5%.

For self-insured employers, who have a fiduciary responsibility to manage their healthcare plans wisely, this isn't just expensive; it's unsustainable. Fortunately, there's a straightforward path for employers to reassert control over their health claims data and secure bargains for themselves and their employees.

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It starts with four foundational tenets: Own your data. Understand your contracts. Pursue independence from brokers and carriers. And leverage independent practitioners to deliver high-quality, affordable care.

1. Own your data
Owning your claims data is the gateway to regaining control. Most mid-sized and large employers self-insure, meaning they directly fund employee healthcare costs. Yet despite this model, many outsource claims processing, network design and pricing decisions to insurers and brokers — losing visibility and control over how dollars are spent.

There's nothing inherently wrong with outsourcing administration. But when employers lack access to their own claims data, they can't detect overpayments, fraud, or inefficiencies. That's not just inconvenient — it's a liability.

But many brokers and carriers are all too happy to keep it that way.

Consider Mars, the global candy maker, which recently sued its insurer for allegedly using dummy billing codes to obscure fees and inflate revenue. If a Fortune 500 company like Mars can be blindsided, smaller organizations face even greater risks.

Access to claims data allows employers to identify fraud, waste and abuse. It also helps them spot cost-saving opportunities, like switching from $500 brand drugs to $50 generics, and recognize health trends early so they can respond with preventive care.

Finally, claims data can enable employers to design higher-value provider networks, avoid overpriced services and lower overall expenses. For example, if claims show a spike in cardiovascular issues, employers can proactively offer heart health screenings, coaching and benefits that reduce emergency care costs.

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2. Understand your contracts
It's not enough to have access to data. Employers also need to understand what their contracts allow and restrict. Many employers are surprised to find they've signed agreements that obscure administrative fees or markups, allow minimal accountability for outcomes, or include "evergreen" clauses that limit flexibility.

Employers should insist on clear, auditable contract language with brokers, pharmacy benefit managers and carriers — and renegotiate terms that don't align with their goals.

Flexibility and transparency are vital to prevent unnecessary costs. In Chicago, a 2024 analysis showed that a colonoscopy cost $2,100 at a hospital versus $1,300 at an ambulatory surgical center (ASC), and under $600 at an independent physician's office.

Yet employees often have no way to tell the difference. Further, if they face the same co-pay at all sites, they have little incentive to choose lower-cost options, regardless of what their decision costs their employer.

With contract flexibility and access to claims data, employers can identify and nudge their employees toward more cost-efficient providers. And that can result in significant savings.

3. Pursue independence from brokers and carriers
You don't need to be a Fortune 500 company to redesign your network. Employers with just a few hundred employees can contract directly with local ASCs, imaging centers and surgical specialists. They can also implement reference-based pricing, adopt high-performance networks built around independent practices, and explore direct primary care models for everyday access and preventive care.

By thinking creatively, even the smallest companies can develop customized networks that reduce their costs and expand access to convenient care.

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4. Leverage independent practitioners to deliver high-quality, affordable care
In my work with a leading independent physician group, I've seen mid-sized employers save 20% to 40% on surgeries and procedures. Patients treated at independent practices also experience faster access to care, shorter recovery times and fewer ER visits. That makes independent practitioners a smart option for cost-conscious employers willing to think outside the box.

Skyrocketing healthcare costs aren't inevitable. But reform won't come from brokers or carriers — it must be driven by employers who demand transparency, accountability and better value.

By reclaiming their data, auditing their contracts, rethinking their partnerships and embracing independent providers, self-insured employers can reduce costs while elevating the quality of care.