Self-Insured Employers Are Taking Action on How Their Health Plans Are Designed and Financed

The Midwest Business Group on Health held its 46th Annual Conference in Chicago on May 5 and 6. The theme this year was "Employer Blueprint for Action," and the tagline underneath it said it all: Unite. Demand. Disrupt. Repeat.

About 300 employers, consultants, benefits leaders, and healthcare advocates gathered for two days of sessions. The conversations ranged from plan payment integrity and revenue neutrality agreements to GLP-1 plan design, cell and gene therapy coverage, musculoskeletal programs, cancer navigation, and the deeper question of what employer-sponsored health benefits exist to do. Below are some insights and thoughts that stood out.

The Keynote That Set the Tone

Chris Deacon of VerSan Consulting, LLC opened the conference with a session titled "Disrupting the Healthcare Heist." Chris ran the State Health Benefits Program for New Jersey, covering 820,000 lives and roughly $7 billion in annual spend. She came with receipts.

One of the first things she did in that role was demand something straightforward from vendors: unit cost guarantees. Not aggregate discount percentages, but specific answers to specific questions. What are we paying for this DRG at this ZIP code? Vendors had to guarantee that unit cost increases would not exceed a defined percentage year over year. She also embedded contract language requiring the plan to pay the lesser of the negotiated rate or the billed amount. Her analogy: "I don't want to pay over sticker price." It sounds obvious but is not standard practice.

During a review of out-of-state claims, she discovered the plan was routinely paying above the billed amount (in some cases significantly above). When she requested EOBs for those claims, they showed the plan paying the billed amount. Bank records showed something different. When she pressed the carrier, she was told the EOBs were programmed to display only the billed amount because showing the true payment figure might raise a red flag. Her response: "So you're telling me that you knowingly send explanations of benefits to members in the US mail with knowingly false information?" The situation eventually led to a $100 million settlement.

On shared savings, she presented a case study that illustrated a broader pattern. One claim: $11 million billed, $875,000 to the provider, over $2.5 million retained by the insurance carrier, $670,000 to the repricing company, and over $4 million paid by the employer. Less than $1 million went to actual care.

She noted that across thousands of claims she reviewed, shared savings fees exceeded what the provider was paid in 79% of cases. Her framing: you can call it fraud, waste, and abuse. You can call it administrative waste. But you certainly can't call it healthcare services.

She closed this section with a concept that reframed the entire transparency conversation: revenue neutrality agreements. These are contract provisions that guarantee a hospital system a minimum revenue floor year over year, regardless of what happens with steerage, utilization, or quality. Her example: if a hospital earned $10 billion in 2025, the contract guarantees $10.5 billion in 2026, automatically. As she put it:

"If those negotiating on your behalf are agreeing to pay more for healthcare next year, regardless of what you do, you will never pay less for healthcare."

When claims volume is not hitting that guaranteed floor, the mechanism to square it up is paying above billed charges. She showed data on eight hospital systems where one system was paid above billed charges 72% of the time, to the tune of $24 million over billed amounts in a single period.

Her bottom line brought the price transparency question full circle: "You could have all the price transparency in the world. You can tell me that the service costs $10,000, but if $12,000 is coming out of my bank account, and I don't know that, price transparency doesn't help me."

"Price transparency without system-wide transparency is really just a one-legged stool."

The Reactor Panel: What This Looks Like in Practice

After Chris's keynote, Cheryl Larson moderated a panel with Leah Binder of The Leapfrog Group, James Gelfand of the The ERISA Industry Committee, and Shawn Gremminger of the National Alliance of Healthcare Purchaser Coalitions.

James Gelfand framed the policy environment with a Game of Thrones reference: "Chaos is a ladder." His point was that while national headlines feel chaotic, a number of meaningful wins have accumulated for employers in recent months, including PBM reforms, honest billing requirements in Medicare, and Department of Labor action requiring vendors to disclose their compensation and who they are working for. None of these are dramatic sweeping changes. All of them create meaningful pressure if employers know to use them.

Leah Binder described revenue neutrality agreements as "something out of 1984."

If a hospital system is contractually guaranteed not to earn less next year than it earned this year, regardless of what happens with steerage, utilization, or quality, then an employer's ability to drive employees toward higher-value care is structurally undermined before it starts.

She said this explains a lot about "why it's so hard to do fundamentally basic things, like telling employees, 'Don't go to this unsafe hospital.'"

Shawn Gremminger's reaction to Chris's keynote was the most direct: "It should not be this hard to be a plan sponsor and have to deal with the stuff that you guys have to deal with on a daily basis." He pushed employers to move beyond treating this as a financial problem and to name it for what it is: a moral and ethical failure when plan assets are being diverted away from care.

On the question of why employers struggle to act collectively: Shawn made the case that accepting 98% alignment on a shared contract template is worth more than individual employers insisting on their own custom terms. Collective pressure requires some willingness to compromise on specifics. James was direct: if a vendor will not agree to never pay above billed charges, and to never earn more in recovery fees than the provider received for the underlying claim, that vendor should be fired.

GLP-1s: The Strategy Question That Won't Resolve Itself

Two sessions explored GLP-1 coverage and obesity management in depth.

Justin Ryder, PhD, made the clinical case for reframing GLP-1s as systemic metabolic therapies rather than weight-loss drugs. He walked through evidence on cardiovascular disease, type 2 diabetes prevention, and the recently completed FLOW trial on semaglutide in chronic kidney disease. His framework for employers: set a budget, prioritize the highest-risk cohorts first, those with type 2 diabetes and established cardiovascular disease, and expand eligibility as savings materialize. He was direct about the alternative. You are paying either way. The question is when and for what.

He also flagged something that drew a lot of reaction in the room. CVS Caremark removed Zepbound from its standard formularies in July 2025, directing patients on the drug to switch to Wegovy instead. A class action lawsuit was subsequently filed over the change. The broader question the session raised: as formulary decisions of this scale become more common, how are employers thinking about their own role in defining what coverage guardrails look like?

Beth Arnett, CEBS from Bon Secours Mercy Health and Roper St. Francis Healthcare offered a real-world look at how a large Catholic health system is navigating this. Bon Secours Mercy Health does not currently cover GLP-1s for weight loss and instead built a behavioral weight management program that launched in early 2025. At 90 days, 79% of enrolled members were engaging with a coach five or more days a week. Among participants with type 2 diabetes, 84% reduced A1C by an average of 1.2 points. 80% of participants lost weight. 32% reduced high-cost medication utilization. ROI projections run around $6,000 per member for type 2 diabetes participants and approximately $3,000 per member for those who were pre-diabetic or participating solely for weight loss.

Roper St. Francis covers GLP-1s for weight loss and requires that covered members enroll in a comprehensive bariatric clinic program as a condition of ongoing access.

For 2027, Beth is building a proposal combining a subsidy model with direct-to-employer pricing to reduce PBM spread, in-house pharmacy dispensing, and a hard requirement to pair drug access with existing behavioral health infrastructure.

Steven Sfikas from Morningstar described a gold carding model where only clinicians employed by their chosen obesity management partner can prescribe GLP-1s for weight loss under the plan. When a member presents a prescription from an outside prescriber, the PBM rejects the claim and redirects the member to the clinical program. The approach introduced friction, and they conducted member polling to gauge the reaction. But in his scenario analysis, the difference between doing nothing and implementing the clinical program with narrow prescriber controls is on the order of seven figures in annual savings. He also noted that working outside the PBM's preferred program introduced additional data-sharing costs that required coalition partner benchmarking and direct negotiation to resolve.

Employer Stories: Where Plans Meet Real Lives

Several employer presentations stood out for their combination of data and human specificity.

Amy Hutkowski from Fortune Brands Innovations Innovations described discovering that autoimmune conditions, scattered across digestive, musculoskeletal, neurological, dermatological, and endocrine categories in their claims reporting, were collectively a hidden top five cost driver. Once they connected the data horizontally, autoimmune conditions represented about 17% of total medical and pharmacy spend. Average cost for an autoimmune member was 2.2 times the overall member average. They partnered with WellTheory, launched January 1, 2025, and within 60 days had 100% of enrolled members reporting improvement in at least one symptom area and an 89% reduction in depression scores. They also shared the story of a 36-year-old employee with a decade-long history of ulcerative colitis who had a colostomy scheduled, entered the program, and after six months had that surgery cancelled by his physician.

Autoimmune conditions accounted for roughly 17% of total medical and pharmacy spend at Fortune Brands, with average autoimmune member cost at 2.2x the overall average.

Theresa Conley, MPA, CEBS, CPSP from Ferguson described implementing a digital MSK program with Hinge Health for a 32,000-person workforce that is 75% male, primarily frontline and industrial, spread across more than 1,700 locations. 69% of members initiated their first session on day one of enrollment. 61% of sessions occurred outside traditional business hours. Nearly half of engaged members reported pain in multiple areas, and those multi-site members saw 42% greater average pain improvement than single-site members. They expanded to pelvic floor care in early 2025 through their Empower women's Business Resource Group, with nearly 50% symptom reduction within the first 90 days.

Theresa was candid that early communications for the pelvic floor program used imagery and language that made it seem exclusively for women, which narrowed perceived eligibility. They reworked everything before 2026 annual enrollment.

Dominique Matthews, MBA, MPH from United Airlines described an enterprise-wide metabolic health program built on diabetes reversal principles, covering 106,000 employees with roughly 90% unionized. The program does not rely on GLP-1s. It has reduced high-cost claimants, achieved positive ROI, and generated member testimonials describing changes that go well beyond plan metrics. United recently lowered the BMI entry threshold to expand eligibility and is already seeing strong outcomes in the newly eligible population.

Jan Berger: The PBM Session

Dr. Jan Berger spent eleven years as a senior executive at CVS Caremark, including roles as Vice Chief Medical Officer and Chief Innovation Officer, before spending nine months in Washington working on Medicare Part D. She opened with full disclosure: she used to run one of these organizations, she knows how they work from the inside, and she consults for pharmaceutical manufacturers and sits on pharma boards. She was clear that everything she said reflects her own views, not those of any company she advises.

She started with history. PBMs emerged in the 1960s and 1970s to solve real problems, bringing electronic claims adjudication, real-time processing, and data infrastructure to a fragmented system. In the early days they were ironically the more transparent player, winning business by offering better reporting and data to employers. Then rebates exploded. Where rebates once ran 5 to 10% on brand drugs, the economics shifted dramatically, and today many drugs are excluded from formularies not because of clinical inferiority but because they lost their rebate competition. PBMs started as infrastructure and data partners and morphed into powerful financial intermediaries driven by rebate economics rather than clinical value, largely because policy and contracting allowed and reinforced it.

She made the case that most employers are not getting the rebates they think they are. The mechanism runs through GPO structures created by PBM parent companies, where fees flow to affiliated entities rather than back to the plan. She pointed to public statements from Dr. Steve Miller, who helped create Ascent Health Services while serving as chief clinical officer at Cigna and Express Scripts. After leaving, Miller acknowledged that PBM GPOs engage in double and triple dipping on fees and that drug manufacturers were reducing rebates to pay Ascent more.

The implication: rebate dollars employers believe are flowing back to them are instead being captured upstream through structures their contracts were not designed to see.

She walked through how CAA 2026, while meaningful, will not fully close those gaps unless employers also change what they demand in contracts. Her core argument: the rebate-centric model is structurally misaligned with employer and patient value. It encourages high-price, high-rebate drugs while obscuring true net cost through GPO and affiliated entity structures. Employers need to stop chasing the best rebate and start demanding gross-equals-net and cost-plus arrangements.

Her framework for where to focus: attack spread pricing, redesign or challenge formulary structures including step therapy rules, and pilot cost-plus or direct contracting models. She also introduced a distinction she developed during her Caremark years between good trend and bad trend in pharmacy spend. Good trend is higher drug spend that reduces total medical spend, where adherence to chronic medications prevents hospitalizations and downstream cost. Bad trend is drug spend that does not meaningfully reduce total cost or improve outcomes. She was direct that focusing purely on lowest unit drug cost is shortsighted. As she put it: if you cut back and just take the lowest unit cost, you are going to have the toothpaste issue. Squeeze here, it comes out there. The goal is integrated medical and pharmacy analytics and decision-making, not just a cheaper formulary.

On the future of formularies, she envisions something more clinically precise: coverage and step therapy informed by pharmacogenomics, pharmacokinetics, biomarkers, comorbidities, and concomitant medications. That kind of design could reduce or eliminate fail-first step therapy and move closer to the right drug for the right patient at the right time. The endgame she described is not just a more transparent PBM using the same rebate logic, but cost-plus and gross-equals-net constructs, direct pharma-employer models, and formulary strategies tied to clinical precision and unmet need rather than rebate maximization.

She closed with a personal story that landed differently than any data point. At 66, she was diagnosed with a serious genetic condition identified through enzyme and biomarker testing. The medication that treats it is expensive but, in her words, life-changing. Twice a year she is required to go through prior authorization. The system is effectively asking her whether she still has the disease every six months, at real cost to the health plan, the PBM, providers, and the patient. Her point was not to complain but to illustrate:

Even a highly sophisticated insider who spent her career inside these organizations is subject to the same nonsensical utilization management as everyone else. That, she argued, is exactly why employers must challenge and redesign UM policies rather than accept them as given.

Her closing instruction: "Don't wait for the next RFP. Now is the time."

Ford Koles, Jr.: From Purchaser to Co-Architect

Bradford "Ford" Koles, Jr. opened day two with a macro framing session that was deliberately different in tone. He refuses to call the U.S. healthcare system broken. Fragmentation is his word, because the system is often technically excellent and the dysfunction lives in how incentives are structured across disconnected actors.

He pushed back on the idea that fee-for-service is still the dominant payment paradigm. "You pay 72 ways to Sunday now," he said, citing total risk, partial risk, shared investments, accountable care organizations, bundled payments, and tiered services as just some of what now sits alongside it. He also made the point that drugs have replaced surgery as the sexy frontier in healthcare, with GLP-1 demand as the most visible example of a category-level shock the system was not designed to absorb.

On rationing, he was blunt. Having worked with UK, Canadian, and Australian systems and studied Germany, Japan, and France, his position is that every healthcare system on earth rations care without exception. The difference is visibility. In England, the rationing happens out of the patient's sight. In the U.S., a physician presents four tests, and the insurance company says we only cover one. As Ford put it, when that happens you realize you just got rationed, the same as anywhere else, just with the moment of rationing exposed directly to the patient rather than absorbed quietly by the system. That visibility is both a political risk and an opportunity for transparency and navigation.

He also shared that rural hospitals are operating on fumes. Ford shared with the audience that if they were to look at the balance sheet of certain rural Illinois hospitals right now, they would not be asking how those hospitals can grow over the next two years. They would be asking how they are keeping the lights on and paying their people. According to the most recent Chartis analysis, 41% of rural hospitals are currently operating in the red, with 417 flagged as vulnerable to closure. Hospitals that once delivered babies and provided cancer care have stopped doing both. As Ford put it: "Imagine a rural hospital that doesn't do babies and cancer. That's not a grocery store. It's a gas station." For employers with rural workforces, basic care is already being hollowed out of those locations, and that vacuum is being filled through hub-and-spoke models and system outreach, not anything resembling classic market disruption.

He also cited that 82% of nurses experienced some form of assault or workplace violence last year. As Ford put it: "That's something way deeper and darker that's going on in our land." The deterioration extends further.

Using University of Michigan data, he noted that roughly 52% of adults ages 18 to 26 now meet the criteria for clinical depression, compared to about 5% for adults ages 55 to 65.

His point to the room was direct: the workforce employers are hiring today is carrying a clinical burden that no prior generation faced at that age, and that is not a wellness issue. It is a core operational and cost challenge.

Which brought him to the word he used throughout: diffusion. Not disruption. "I did not use the term disruption because that's not what I'm seeing. It's too complicated for it." His framework is vacuums. Cracks open in care and coverage, and something always fills them. "Every vacuum is filled. Some of them you are filling. Some of them you will hate. Some of them you will applaud." Across Medicaid, the ACA, rural care, retail pharmacy, GLP-1s, and behavioral health, vacuums are opening continuously. The employer's strategic question is whether to resist, partner, or lead the diffusion that fills them.

His closing argument reframed how the room should think about its own role.

Employers are not just customers of healthcare. They are cross-subsidizing the entire working-age healthcare system and serving as a significant backstop for public coverage. That makes them co-architects of the system, whether they choose to see themselves that way or not.

The next five years will be defined by where employers choose to step into the vacuums: GLP-1 coverage with guardrails, rural access partnerships, behavioral health networks, pharmacy access solutions. Inaction is itself a choice, and one that cedes the field to forces employers do not control.

"No one's coming. If healthcare changes in the next 10 years, it will be because you change it."

Where Personal and Organizational Change Intersect

Sue Letang, VP of Benefits at US Foods, gave a unique keynote. She was diagnosed with cancer and lived through the benefits system she had spent her career designing, from the other side. She described realizing that most benefits programs are built for normal days, not for the worst ones.

"The quality of a benefits plan isn't what's revealed during annual enrollment. It's revealed on your worst day."

She came back from that experience and redesigned how US Foods approaches benefits navigation. Her Cancer Box is a structured, step-by-step digital resource covering prevention, screening, abnormal results, diagnosis, treatment, caregivers, and survivorship, accessible 24/7 with no login or password, for employees, spouses, and adult children. She extended the same model to pregnancy. She told vendors to figure out how to work together in the same sandbox or find a different one.

Her message to the room was not tactical. It was about identity. "That's not just meaningful work. That's life-saving work."

Themes I'm Taking Back

A few things stayed with me across the two days.

The data access conversation has moved past "we want our data" to "here is what we are going to do if we don't get it." The fiduciary framing has become a real management discipline for large employers, as opposed to an abstract compliance concept.

Price transparency is one component of what employers need, but what came through across multiple sessions is the real requirement of visibility into all the places where money changes hands throughout the healthcare and pharmaceutical supply chain. Negotiated rates are a starting point.

What gets paid, what gets retained by intermediaries, what flows through GPO structures, what gets embedded in shared savings arrangements: that is the fuller picture, and most employers are still working from a very partial view of it.

The gap between what the negotiated rate says and what leaves the employer's account is not a theoretical problem. Several sessions returned to the same basic principle: contracts should require paying the lesser of the negotiated rate or the billed amount. It is a simple safeguard, but as Chris Deacon illustrated, it is far from universally in place. Building it into vendor agreements is one of the most concrete steps an employer can take coming out of this conference.

Revenue neutrality agreements deserve their own conversation. If a hospital system is contractually guaranteed to earn more next year than it earned this year, regardless of utilization, steerage, or quality outcomes, then demand-side strategies incorporating those specific health systems are working against a structural floor. Employers have certainly found ways to control costs even while working with large carriers that hold these arrangements but understanding how those agreements specifically affect your own spend is a genuine challenge given how many other variables are in play. Would love to hear from others who are working through this.

GLP-1 coverage is not a yes or no question anymore. The question is what clinical infrastructure, what subsidy model, what prescriber controls, and what behavioral pairing you are willing to build around access.

And the human stakes showed up repeatedly. In Sue Letang's cancer story. In the Fortune Brands employee who avoided a colostomy. In Leah Binder's account of finding preventable never events in a claims dataset and tracing one back to a 37-year-old woman who ended up on long-term disability.

True north in this work is recognizing when your employees' lives are at stake. As Leah put it: "Every one of those numbers on those claims is a human being." When you stay true to that, you will find what you need to make things better.

Grateful to Midwest Business Group on Health and to everyone willing to share what they accomplished and what challenges they are still grappling with.