Sandra Clarke has seen healthcare cost management from all angles, including pharmaceutical companies, insurance companies, and finance departments. A former chief financial officer at Blue Shield of California, she points out that the company paid for its employees' medical expenses like any other employer. “We didn't have free health care,” she told a room packed with CFOs at the CFO Leadership Council's Spring 2026 Leadership Conference in Boston this week. “We paid like everyone else.”
We live in an era where premiums are increasing by 10 percent annually for most employers and more than 20 percent for smaller employers. Only one in four employers can absorb increased health care costs without making cuts elsewhere in their business. And financial and legal risks are increasing. When Johnson & Johnson employees sued the company for failing to properly manage health care costs, it set off a wake-up call, even if the case was ultimately dismissed. “Employees and other groups have become more vocal about what that cost is and what they are going to do about it.”
To help with this, she laid out six “watchdogs” for CFOs, questions that all finance leaders should be addressing right now.
1. Do you have the right data (including all claims and pharmacy costs) to make informed decisions?
Clark returned to this issue again and again. Without clean and complete data, it is impossible to control healthcare spending. Without it, everything is just speculation. “If you don’t own that billing data, or at least have access to it, you’re budgeting blindly.
“Do we have the right data to make good decisions about what our strategy should be, what our budget should be? And how well do we understand the health of our population and its stability or instability? Because if we don't have good answers to these questions, our decisions about the type of coverage we want and the partners we want to use are going to be influenced, and perhaps negatively impacted.”
Be wary of vendors who charge additional fees for access to your information. “We’ve seen some companies try to sneak in extra fees if they want more access to their data,” she said. Pharmacy data is a particular blind spot. Specialty drug costs are the fastest growing item for most employers, and despite industry claims to the contrary, transparency in PBM pricing remains largely illusory, according to Clark.
2. How well do you understand risk pools and volatility?
Knowing your data is step one. Understanding what that means for specific employees is step two, but many CFOs skip it.
A young, healthy population is exposed to very different influences and risks than an older, more attrition workforce. Carriers consider multi-year claims experience when pricing and renewing plans. Your industry also matters. Some sectors are inherently more vulnerable to health outcomes simply due to the nature of the work. And geography shapes choices in ways that aren't always obvious. A rural workforce with one hospital system within a 100-mile radius has little bargaining leverage. Meanwhile, urban employers choosing whether to include major academic medical centers face truly significant financial decisions.
3. Is there a broker or benefits consultant focused on our goals and needs?
Not all brokers work for you. There is a big difference between an advisor who takes your situation seriously and an advisor who runs a commodity strategy. She also notes the difference between a broker, who primarily presents options and handles trading issues, and a consultant, who strategically looks at the big picture of overall profits. Both have value. The key is knowing which one you're using.
“Did they give me a sheet that they had given to a lot of other organizations? Or did they really listen to what we were trying to do and help us come up with options? Perhaps it's not a bespoke program, but choosing the option that best suits my company's needs from what's available.”
4. Have you considered all planning options, considering cost and employee satisfaction?
Because costs and employee satisfaction go in opposite directions, Clark urges CFOs to be honest about where they actually land on that spectrum.
“If you're using a no-wear program, it's probably too expensive. But think about that balance and think about whether you're actually leaning too far in either direction.”
The more difficult conversation is aligning leadership, she said. in front Make changes that your employees don't like. Her example is taking a well-known and expensive hospital system off the network.
“If you were in Northern California and we took Stanford out of the network, what would you yell about? It's a very expensive system. Are you willing to choose your local academic hospital? Look, we're going to take your best interests out. Do you want to say, “I know you don't like that even though we're doing this as a priority?'' We may have to change doctors, but this is what it means in terms of meeting our overall business goals and being able to pay for other things.''
In a recent survey, about 80% of people believe that doctors act only in the best interests of patients and that the problem lies with insurance companies. This is the sentiment that CFOs judge when trying to streamline network decisions. Hospital systems are adept at pressure campaigns. “They're very good at convincing patients that if they don't go back into the network, they're going to be in serious harm to their health,” Clark said.
5. Are vendor incentives aligned with our goals?
How you pay your partners determines their optimization. She acknowledges that the concept of value-based care, where vendors are compensated when costs go down and quality goes up, is actually incomplete. But the intent is right. If your broker, third-party administrator, or specialty vendor is not being compensated in a way that aligns with your goals, consider that their advice reflects that.
“Make sure they're also participating in the game, so they're getting paid for their performance and the results they show.”
6. Does our contract provide full transparency regarding fees and pricing?
Please read the contract. Specifically, find out what data access costs, how pricing is structured, and whether there is true transparency and a well-packaged overview.
Clark is particularly skeptical of pharmacy benefit managers who claim to have moved to transparent pricing models. “When all of these models came out, they all employed a lot of very smart actuaries who modeled exactly how to change the revenue model in a way that doesn't impact revenue. So I'm still very skeptical that it's really going to reduce our costs.”
Her recommendation: If possible, get competitive bids. “Rather than choosing one, we will be looking at several options, just like any other contractor.”
For Clark, it's not a matter of mastery, it's a matter of confidence. CFOs don't need to be healthcare experts, she says. But you need to have an educated conversation, recognize that the answers you get aren't good enough, and feel equipped enough to push back. “If we can change this trend in the spending line even a little bit, it can have a big impact,” she said.
