By Morgan Sweeney | The Center Square
(The Center Square) – A number of companies have responded to state financial officers’ December letter urging them to audit their health care spending.
In line with multiple initiatives from the Trump administration pressing for greater price transparency in health care, a little over a month ago, a group of state treasurers and auditors submitted a letter to Fortune 500 companies imploring them to review their health care spending and respond to their letter by Jan. 15.
Publicly traded companies have a responsibility to their shareholders to make informed financial decisions. For Fortune 500 companies, that includes a responsibility to the public dollars – like pension funds for teachers, first responders and others — that state financial officers have invested in them with the expectation of strong returns.
State financial officers encouraged the companies to leverage an executive order signed by the president in February to ensure they’re not overpaying for health care.
“When large companies overspend on excessive healthcare costs, shareholder value drops and Americans’ retirement security is put at risk,” according to a statement from the officers.
The order built upon an earlier order from the president’s first term in 2019. That order had primarily required hospitals to publicly post what they charge for common medical goods and services so that patients could compare prices across hospitals.
The newer order went one step further in attempting to ensure transparency, calling for the “disclosure of the actual prices of items and services” instead of mere estimates, as well as updated enforcement policies to ensure compliance with reporting requirements.
The state financial officers argued that if companies will now have greater access to health care pricing data, then their fiduciary duty compels them to make more informed decisions about the health care coverage they provide to their employees and how their employees utilize that coverage.
On Thursday, the administration unveiled “The Great Healthcare Plan,” a “comprehensive plan to lower drug prices, lower insurance premiums, hold big insurance companies accountable, and maximize price transparency” in the health care industry.
It calls on Congress to codify what the administration has done with most-favored-nation pricing and aims to lower insurance premiums and force insurance companies to make their rate and coverage information readily available in “plain English.”
OJ Oleka, the CEO of the State Financial Officers Foundation, expressed support for the newly revealed plan in a statement shared with The Center Square, viewing it as a continuation and expansion of initiatives already underway.
“As over a dozen state financial officers told the Fortune 500 last month, fully enforced price transparency empowers fiduciaries to hold insurers accountable, reduce waste, and redirect savings into growth and returns for shareholder. As President Trump surely knows, that can make an enormous difference in pension value and the retirement security for millions of American households,” Oleka said.
State financial officers are working with companies to help them leverage new federal health care price transparency rules to their benefit and their shareholders’.
Oleka added that he was “thrilled to see price transparency as the centerpiece” of the president’s plan and said he believed it would help Americans “tired of high health care costs,” as well as “every leader working hard to lower them.”
State financial officers are working with companies to help them leverage new federal health care price transparency rules to their benefit and their shareholders.