The real drivers of employer healthcare costs (and what to do about them)
An NEJM article gets the diagnosis right: self-insured employers are stuck. The prescription (coalitions, better contracting, and collective bargaining) is the definition of doing the same thing and expecting different results for 25 years and counting. More informed purchasers won’t fix the system. It needs a completely different point of intervention.
A recent New England Journal of Medicine article outlines why self-insured employers can't slow healthcare cost growth even though they bear the risk directly. Provider consolidation, misaligned intermediaries, limited expertise, and collective-action paralysis are all very real obstacles.
But the article's solutions (purchasing coalitions, claims analysts, tougher TPA contracts, fee-schedule tweaks, price-transparency lobbying) share a fatal assumption.
The truth is, employers can not fix healthcare costs by becoming better buyers of the same system producing those costs.
25 years of trying proves it.
No one is helping employees when treatment choices are actually made.
Every healthcare dollar traces back to a decision: a referral made, a prescription written, a test ordered, an ER visit instead of a clinic. Those decisions happen in real time, between a clinician and a patient.
Today, employees lack real-time support when those moments happen. The tools employers already pay for (care navigators, wellness apps, benefit portals) all live outside the clinical conversation. They show up too late, if they show up at all, and none of them are connected to what's actually being discussed in the exam room.
The result is a fundamental information asymmetry. Patients trust their clinicians, but without the context to understand what's being recommended, what it costs, or what alternatives exist, they default to yes. That asymmetry is where over-utilization starts.
This is the problem no amount of smarter purchasing can solve. You can’t influence decisions you're not present for, and you can’t steer a system you only see through claims data filed months after the fact.
"Smarter purchaser" keeps failing
The NEJM's recommendations all operate on the supply side. Here's why they're insufficient:
Prices are a symptom. Millions of utilization decisions per day convert prices into costs, and lower unit prices don't help when no one influences which units get ordered or why.
Claims data is an autopsy. It tells you what was billed months ago, not why a PCP visit became a referral cascade or why an employee chose the ER over urgent care.
TPAs and pharmacy benefit managers profit from complexity, so better contracts help at the margin without changing the underlying incentive structure. And purchasing coalitions have existed for decades producing reports and incremental wins, not the rapid cost reduction employers need.
Neatly Health's thesis: move upstream or lose
The cost-management paradigm needs to shift from post-claim reaction to point-of-care intelligence. This is not incremental, it's a different category of intervention.
Point of care means:
Capturing what actually happens in clinical conversations FOR employees, so they leave with clarity, not confusion
Translating clinical complexity into plain language immediately, not through a portal no one opens
Connecting benefits to the actual care plan so decisions about cost and quality happen before they become claims
Creating a real-time feedback loop so employers see what's driving utilization now, not next quarter
The data layer that doesn't exist yet
The NEJM says employers should control their claims data. We'd go further: claims data is fundamentally inadequate.
Employers need pre-claim intelligence, answers to questions claims can't touch:
Why is imaging volume rising? Guideline-driven, or are employees routed to high-intensity settings because they don't know to ask?
Why are ER visits climbing? Access failure, or uncertainty about what's urgent?
Why is GLP-1 spend exploding? Clinical need, prescribing drift, or misaligned benefit design?
This data only comes from being present at the point of care. No claims analytics or TPA reform can produce it.
What employers should actually do
Stop treating cost management as a purchasing problem. It's a decision-support problem, and the people making the decisions need to be equipped.
Demand real-time data. If your vendor can only show you last quarter, they're giving you a history lesson.
Invest in tools employees actually want to use, because if adoption requires an annual enrollment push, it's already failing.
Measure engagement at the clinical moment, not the portal login. The metric that matters is whether employees make better-informed choices when those choices happen.
Build the feedback loop: use point-of-care data to redesign benefits around what employees actually experience, not what the actuarial model predicts.
The bigger point
The NEJM calls employers a "sleeping giant." We'd put it differently:
Employers aren't sleeping. They're trapped inside a system designed to keep them paying, not to help them steer.
The only way out is to change the point of intervention: from the contract table to the exam room, from the claims report to the clinical conversation, and from the employer's spreadsheet to the employee's lived experience of care.
That's what Neatly Health is building: not a better dashboard, not a smarter TPA. A fundamentally new layer at the only moment where healthcare costs can be influenced before they're locked in.
Self insured employers: we’re building early pilots with right fit organizations. Take our survey to begin the process, and reach out to learn more.
