Recent reforms targeting pharmacy benefit managers (PBMs) have strengthened transparency and rebate pass-through requirements, shifting financial incentives toward patient care. These changes, alongside a settlement with Express Scripts and proposed rules from the Trump Department of Labor, represent significant momentum toward accountability in drug pricing.

The Need for Broader Transparency

While drug spending is substantial, the largest share of medical expenditures comes from hospital and facility services, representing the greatest financial exposure for self-insured employers. Approximately two-thirds of workers with employer-sponsored insurance are enrolled in self-insured plans, where employers directly pay medical claims.

The Information Imbalance

Despite bearing the financial risk, employers often lack full visibility into how these payments are calculated. Insurers and third-party administrators (TPAs) control contracted rates and pricing, often classifying this information as proprietary. Employers receive summary reports but lack access to the detailed claims data needed for effective cost control.

How Lack of Transparency Impacts Employers

This imbalance is striking: the party paying the bill has the least insight into how it’s calculated. Without itemized invoices and audit rights, employers treat healthcare costs as unavoidable rather than controllable. Better information would allow for more strategic benefit design.

Employers could steer workers toward high-value hospitals, contract with local providers, or expand workplace clinics, but these innovations require cost and outcome visibility – information currently unavailable. The current system incentivizes insurers, whose revenue rises with premium volume, while employers absorb rising costs through reduced margins and slower wage growth.

Economic Implications of Rising Costs

Employer-sponsored insurance covers roughly 160 million Americans, and national health expenditures exceed $4 trillion annually. Rising benefit costs suppress wages; a recent Bank of New York study found insurance cost increases of over 13% last year, potentially reducing wage growth by almost a full percentage point. Healthcare inflation impacts premiums and overall economic prices.

Legislative Solutions and Future Steps

The Patients Deserve Price Tags Act, sponsored by Sen. Roger Marshall and Rep. John James, aims to expand transparency by strengthening access to pricing and claims data, granting employer health plans clearer audit rights. The Trump administration could further build on PBM reforms by applying similar transparency standards to TPAs and claims administrators.

This isn’t about price controls, but about information symmetry. Employers should have access to how their health plan dollars are spent. Transparent access to full claims data would empower employers to function as the nation’s largest purchasers of healthcare.

Potential Savings Through Audits

Independent oversight often uncovers overpayments, with audits and payment integrity reviews recovering roughly 1-1.5% of all claims processed. This translates to tens of billions of dollars across the market. Shifting utilization toward lower-cost providers can generate even larger savings, benefiting wages, hiring, and investment.

PBM reforms demonstrate that transparency and accountability can gain bipartisan support. Extending these principles to claims data would empower employers, sharpen competition, and discipline costs across the healthcare system. Congress should build on this momentum to extend transparency to the claims data driving the majority of health care spending.

Bobby Jindal was the governor of Louisiana from 2008-2016 and a candidate for the 2016 Republican presidential nomination. Gingrich 360 consults with various companies in the health care industry that would be affected by health care transparency reforms.