Purchaser-Driven Contracting: A Collective Approach to Securing Transparency and Accountability 

Why Employers Lose Leverage Before Contracts Are Final 

In most health plan purchasing processes, employers do not have full access to review or secure detailed health insurance contract terms until late in the selection process, after carriers have been narrowed to finalists.

By the time contract language is available, limitations often become clear:

• Restrictions on access to employers’ own claims data

• Limits on contracting directly with high-quality hospitals and health systems or providers

• Lack of clarity about fees, incentives, and total cost

At that point, starting over is expensive and time-consuming, and employers’ negotiating leverage is significantly reduced.

When contract terms are addressed late in the process, employers may enter agreements that restrict transparency, limit access to data, and reduce flexibility. These limitations can contribute to barriers to care for employees and fewer options for employers to manage affordability and quality.

Federal law requires employers to actively oversee their health plans and gives them legal rights to transparency and access to their own data. Yet traditional purchasing processes make it difficult to meet those responsibilities.

Why Employers Chose to Act Collectively 

Rather than accept the status quo, five employers, representing 192,000 covered lives, joined with PBGH to clearly define the contract terms they need to properly oversee their health plans. All shared the same frustration: being unable to secure key contract provisions until after it is too late in the process to easily make fundamental changes.

Instead of reviewing contract terms at the end of the process, the group agreed on baseline expectations upfront and asked vendors to respond before any future individual procurement discussions with vendors.

This collective approach was intentional to signal the seriousness of the need and the case for fair and transparent contracting terms to the market. By acting together, employers strengthened their ability to set an expectation of transparency, accountability, and access to their own data.

What this RFI is NOT about: This RFI was intended to be informational and educational for members and NOT about employers collective purchasing or bargaining. Each participating member reserves the right in vendor selection and use of the contract terms for their individual procurement process and decisions.

How Employers Set Expectations While Leverage Still Exists 

The approach is straightforward: These employers are incorporating contract review as part of their initial procurement planning process rather than as a final step. While they still have leverage, they set clear contract expectations early, focused on what employers need to properly oversee their health plans:

• Full access to their own claims data

• Transparency about fees, revenue sources, and incentives as well as any conflicts of interest

• Flexibility to innovate, including contracting directly with high-quality providers

• Contract provisions that enable accountability

• Contract provisions that address emerging best practices

Insurance carriers and administrators were invited to respond to this RFI and requirements. Their responses or non-responses as well as their willingness to partner for changes would be taken into consideration by the employers in their individual procurement planning or discussions with any of these vendors.

What Vendor Responses Revealed About the Market 

The contract requirements were sent to 46 insurance carriers and administrators. Some responded. Many declined or did not respond.

Employers treated this as critical information. A vendor’s unwillingness to commit to baseline transparency and accountability during this RFI evaluation offered insight into how they would behave once under contract.

Among those that did respond, clear patterns emerged:

• Transparency remains a dividing line: Smaller, independent administrators were generally more willing to disclose fees, revenue sources, and potential conflicts of interest. Many large national carriers said they would only provide what regulations require.
• Access to employer data is not guaranteed: Some vendors affirmed employers’ right to unrestricted access to their claims data. Others imposed barriers, incorrectly citing privacy laws or requiring permission to access data employers are legally entitled to.
• Willingness to change varies by vendor: Some organizations showed flexibility and openness to new accountability standards. Others made clear they prefer traditional approaches and one-on-one discussions that maintain opacity.
• New market options are emerging: The process highlighted new and independent market entrants willing to meet employer expectations, giving employers additional partner options.
• Employers must lead the changes: Limited vendor engagement due to the perceived lack of incentives in this RFI demonstrated the urgent need for employer leadership in shifting the market practices.
• Policy advocacy and changes are key: This was evidenced by the lack of vendor commitment or willingness to change without legal or regulatory requirements or enforcement.

Why This Approach Changes Employer Oversight 

This approach helped employers identify which vendors align with their needs before other conversations begin, avoiding costly surprises later and strengthening their ability to set expectations of their potential vendors.

More broadly, federal law requires employers to actively oversee their health plans and gives them legal rights to transparency and access to their data. That oversight is not possible without clear contract standards and accountability mechanisms.

When expectations are set early, employers regain leverage when it matters most, leading to health plans that reduce barriers to care and better manage costs for employees and families.

PBGH members have exclusive access to: 

• Detailed vendor response scorecards

• Sample contract language and provisions

• Implementation guidance for your procurement process

For more information or if you have any questions, contact Aurora Chen, Vice President, Advisory Services, at achen@pbgh.org