Employers Can Now Save by Comparing Health Care Prices

Am J Manag Care. 2026;32(Spec. No. 6):eSP4-eSP6. https://doi.org/10.37765/ajmc.2026.89929

Employers purchase health care coverage for half of all Americans. In 2025, the average annual premium cost for employer-based coverage for a family of 4 was nearly $27,000.¹ Employers pay approximately $20,000 of those premium costs, with the remainder coming out of employees’ paychecks.¹ These high costs limit employers’ ability to invest in their businesses, depress wages, and constrain American businesses’ global competitiveness. For public employers such as state and municipal governments, high health care costs mean less money for education, housing, infrastructure, and other public priorities. The city of New York, for example, spends an estimated $11 billion annually, or roughly 10% of its budget, on health benefits for its approximately 1.2 million employees, retirees, and dependents.² The high cost of health care benefits is largely driven by health care facility prices.³ Even a 1% increase in hospital prices leads to lower incomes, job losses, and increased unemployment claims.⁴ These effects are concentrated among lower- and middle-income workers.

Given these stakes, how can employers find ways to improve the affordability and quality of the health care they purchase? Until recently, employers have lacked reliable ways to know whether they are purchasing health care coverage at a fair price. When employers purchase coverage from insurers or third-party administrators (TPAs), they typically do so through brokers, in some cases with the input of benefits consultants. Brokers and consultants may provide employers with estimates of the total costs of their benefits, including the percentage discount that an insurer or TPA negotiates from providers’ chargemaster prices. Brokers or consultants, in some cases, provide purchasers with discounts broken out by specific service lines (eg, hospital inpatient charges, physician fees, emergency room, or other broad categories). But these analyses do not provide the underlying prices from which the discount is subtracted.

Furthermore, brokers and consultants do not necessarily provide employers with a comparison of what different carriers charge. Some brokers receive compensation from insurers or TPAs, which may affect the guidance they provide to employees. This combination of opacity and misaligned incentives has historically left employers without adequate support in making highly consequential purchasing decisions.

However, two 2019 federal rules have begun to bring transparency to health care purchasing. The Hospital Price Transparency (HPT) rule, implemented in 2021, requires hospitals to publish standard charges and negotiated rates by payer. The Transparency in Coverage (TiC) rule, implemented in 2022, requires group health plans and insurers to disclose the rates they negotiate with every health care provider, including all hospitals, physician groups, laboratories, and ambulatory surgery centers.

In 2025, the Purchaser Business Group on Health (PBGH), a nonprofit coalition of 40 jumbo purchasers of health care that collectively spend approximately $350 billion to purchase coverage for more than 21 million Americans, spearheaded a project to analyze TiC and HPT data to determine whether and how employers could use those sources to make more informed health care purchasing decisions. This work was made possible with support from the Peterson Center on Healthcare, a nonprofit, nonpartisan philanthropy dedicated to making higher-quality and more affordable health care a reality for all Americans. An initial cohort of 5 purchasers participated in the project, including 4 large private employers in retail, tech, and aerospace and 1 public purchaser. Through a request for proposal process, PBGH selected Milliman as its analytics partner for the project. Based on employer feedback, the analysis combined price data with safety and quality data from the Leapfrog Group and Embold Health to understand the value of health care services and provide context for prices. The analysis also used deidentified historical claims data from each employer. Each employer received a custom report with insights specific to their purchasing in their markets. PBGH also published the project’s methodology and aggregated findings in 2 publicly accessible reports.^5,6

The analysis shows how TiC and HPT data can reveal prices that were previously obscured in analyses that provided percentage discounts off broad service lines without indicating the underlying prices. For example, the Table shows prices for a CT scan of the abdomen and pelvis (Current Procedural Terminology [CPT] code 74117) in HPT data reported by 2 hospitals in January 2025. The HPT files show that Anthem’s negotiated rate at Sutter Medical Center, Sacramento, was 74% of the chargemaster for this service, whereas its rate at Stanford Health Care was 58% of the chargemaster. Without further information, the larger discount that Anthem negotiated at Stanford Health Care could easily give the impression that this is the more affordable site of care. However, the HPT files show that Anthem’s actual price for CPT code 74117 at Sutter is $5715 compared with Stanford’s price of $9437 due to differences in the original chargemaster prices.

The data reveal a further opportunity for savings. Compared with Anthem, Aetna negotiates lower payment rates for CPT code 74117, resulting in negotiated rates of $3971 at Sutter and $7957 at Stanford. If a comprehensive analysis showed that this pattern of lower prices was consistent across common service codes, an employer purchasing coverage from Anthem that is willing to switch to Aetna—or to use this data to negotiate for prices from Anthem—could find significant savings. Without transparent price data, employers could not compare carriers’ prices using actual dollar amounts. They could therefore unknowingly purchase higher-priced plans or steer employees toward higher-priced providers.

Because employers are tasked with choosing and purchasing health plans, providing them with unconflicted analysis of price and quality data empowers them to purchase high-value coverage for their employees. If a critical mass of employers begins to purchase coverage on the basis of actual negotiated rates, they can collectively drive change across markets, as has been seen in the adoption of reference pricing by some state employee health plans.⁷ Even in this initial phase of PBGH’s work, employers are using this analysis to take action, such as by reconsidering their choice of carriers or plans, negotiating prices with their carriers, and steering employees toward high-quality, reasonably priced providers. This work powerfully demonstrates how transparent price data can introduce market forces that drive value in health care for employers and Americans.

Author Information

Dr Schleifer is an associate director of programs at the Peterson Center on Healthcare and is based in New York, New York. Dr Tsai is the vice president of advanced primary care at the Purchaser Business Group on Health and is based in Visalia, California.

REFERENCES

1. 2025 Employer Health Benefits Survey. KFF. October 22, 2025. Accessed December 17, 2025. https://www.kff.org/health-costs/2025-employer-health-benefits-survey/
2. Local Law 78 of 2023 Report: Healthcare Accountability. New York City Department of Health and Mental Hygiene; 2025. Accessed December 17, 2025. https://www.nyc.gov/assets/doh/downloads/pdf/about/local-law-78-healthcare-accountability-report.pdf
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   Data Actionable for Employers and Public Purchasers. Purchaser Business Group on Health; 2025. Accessed December 17, 2025. https://www.pbgh.org/initiative/pbgh-health-care-data-demonstration-project/
6. Creating a Data Framework by Combining Health Care Cost Transparency and Quality Data for Purchasers. Purchaser Business Group on Health; 2025. Accessed December 17, 2025. https://members.pbgh.org/wp-content/uploads/2025/09/Creating-a-Transparent-Data-Framework-2025.pdf
7. Waldrop T, Brierley L. State reference pricing can lower health care costs equitably. The Century Foundation. August 13, 2024. Accessed December 17, 2025. https://tcf.org/content/report/state-reference-pricing-can-lower-health-care-costs-equitably/