The PBGH Transparency Demonstration Project and What It Means for TPAs, Consultants, and Employers

There is zero correlation between price and quality in hospital care. That is not speculation — it is in the data. The PBGH Transparency Demonstration Project, conducted by the Purchaser Business Group on Health with Milliman and Embold and funded by the Peterson Center on Healthcare, combined price transparency data, claims data, and quality and safety scores from Leapfrog down to the individual NPI level. The result is the first tool that lets jumbo self-insured employers see what they are actually paying, what they should be paying, and how quality and safety compare — all at once.

In this episode, Stacey Richter speaks with Elizabeth Mitchell, CEO of PBGH, whose member employers collectively spend over $350 billion a year on healthcare, about what this project found, what it means for TPAs and consultants, and what employers should be doing with it right now.

WHAT YOU'LL LEARN
✅ Why the Consolidated Appropriations Act (CAA) of 2021 changed the fiduciary accountability calculus for self-insured employers: you cannot outsource this risk to a consultant or TPA, individual C-suite executives and CHROs are personally accountable, and not using available transparency data now actively increases liability

✅ What the PBGH Transparency Demonstration Project actually did: combined hospital price transparency MRF files and health plan negotiated rate files with employer claims data, Embold quality scores, and Leapfrog safety data to give employers a true cost-quality-safety comparison across providers — a tool that did not previously exist anywhere on the market

✅ Why discounts are irrelevant without actual prices: one employer participating in the project discovered she was paying 30% more than her peers for the same services, despite being assured by her consultants and carriers that she was getting competitive rates

✅ Why directly contracted arrangements outperformed TPA-negotiated rates in the PBGH data — confirming a decade of anecdotal evidence that when employers negotiate directly, they get better prices than when TPAs do it for them

✅ How site-of-service cost variation is dramatic enough to matter: the same high-quality service from the same type of provider can cost half as much at a different location — without any compromise in care quality or access

✅ Why some incumbent consultants and TPAs are now being called into client boardrooms to answer hard questions — and why unconflicted advisors who can actually use this data have a competitive advantage for the first time in the history of employer-sponsored health benefits

WHY THIS MATTERS
As Elizabeth Mitchell puts it, if you are a self-funded employer and you do not use this data, it is irresponsible. The tool exists. The compliance obligation is clear. And for the first time, employers have enough information to distinguish high-value providers from expensive-but-not-better ones, to build their own high-value networks and Centers of Excellence, and to hold their advisors accountable. The market for high-value providers is finally becoming visible — but only for the employers willing to look.

=== LINKS ===
🔗  Show Notes with all mentioned links:  
https://cc-lnk.com/EP491

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06:35 How did PBGH's transparency project start?

07:35 EP428 with Julie Selesnick.

07:37 EP408 with Chris Deacon.

07:39 Why the changes to the CAA and ERISA meant heightened risk for employers and individuals within companies.

09:09 "You can't outsource the risk."

11:10 How PBGH's transparency project demonstrated some clients being noncompliant.

12:52 Why is it irresponsible not to use the data presented if you're a self-insured employer?

15:06 How did PBGH use the transparency data and apply it effectively to improve their offerings and business?

18:37 Why TPAs should not negotiate contracts.

19:17 EP485 with Cristin Dickerson, MD.

19:22 EP486 with Stan Schwartz, MD.

19:24 EP488 with Mark Cuban and Cora Opsahl.

20:58 "There is no good price for unsafe care."

21:36 How PBGH found using the transparency data to be totally feasible.

25:03 EP483 (Part 1) with Jonathan Baran.

25:32 Why the market will evolve with this data.

28:04 EP369 with Keith Hartman, RPh.

28:06 EP370 with Erik Davis and Autumn Yongchu.

28:34 What PBGH discovered about high-value centers and centers of excellence.

28:59 EP240 with Olivia Ross.

32:26 Why incentives are another challenge.

33:49 Why this is good news for unconflicted benefits consultants.

36:04 EP487 (Part 1) with Kevin Lyons.

39:48 Why transparency is going to become the new normal.

40:22 The Innovator's Dilemma by Clayton M. Christensen.

42:14 EP436 with Elizabeth Mitchell.

44:07 EP286 with John Rodis, MD, MBA.

45:22 Why there is a great incentive to be a great clinician right now.

46:18 How this information can motivate competition in the right place.

46:52 EP490 (Part 1) with Shane Cerone and Sam Flanders, MD.