U.S. manufacturing return requires Chief Health and Welfare Officer (CHBO) to repair welfare procurement – Healthcare Blog

Matt McCord

The U.S. manufacturing industry is making a comeback. Driven by tariffs, supply chain instability and shifting economic focus, companies are re-cultivating production, which invests in U.S. labor and operations.

However, there is still one major hurdle: the crushing cost of healthcare in the United States.

For decades, U.S. employers have overpaid without improving results. The swelling insurance premiums have bloated administrative costs, and the opaque middleman-driven system has made businesses the highest health care costs, as much as the world's highest competitors.

Shouldn't we ask for a more efficient, more efficient healthcare model to support it if manufacturing is returning? The same industry that once escaped labor costs now has to face the reality that the old ways of buying health care have been destroyed.

The Consolidated Appropriations Act (CAA) and the Growing Trust Risk

The game has changed. The 2021 Consolidated Appropriations Act (CAA) imposes strict new trust requirements on employers who sponsor health plans. Companies can no longer blindly trust large insurance companies or PBMs in their best interests.

If businesses cannot properly manage their healthcare spending, they are now responsible for excessive costs, lack of transparency and conflict of interest.

🔴It's not just theoretical – JP Morgan Chase is now facing a class action lawsuit about how it manages its employee health plans, with board members being called defendants.

Employers always scrutinize office supply costs, travel budgets, and supplier contracts, but they have handed over healthcare procurement to third-party insurance companies with zero liability.

Now, a lack of supervision is a legal risk.

Why employers need chief health and welfare officer (CHBO)

Each major business function has executive leaders to ensure strategy, efficiency and accountability:

• The chief financial officer manages financial health accurately.
• COOS streamline operation to achieve maximum productivity.
• CIOs use technology to drive innovation.

So why should we continue to let third-party insurance companies and middlemen decide to buy health care without the dedicated administrators overseeing the strategy?

Mark Cuban recently called for a new C-suite role: CEO of Healthcare (HCEO). The Chief Health and Welfare Officer (CHBO) may be more appropriate and confusing. The leader will act as a trustee for the company, ensuring that its health benefits strategy delivers better results at lower costs – just like the CFO does with financial oversight.

This is not a job in human resources.

Most CHOS are already managing compensation, talent strategy, DEI, workforce development, compliance, and more. It is unrealistic and unfair to expect HR to also master complex health care contracts, negotiate with PBM, and implement a trust responsibility system.

The Chief Health and Welfare Officer will ensure:

✔ Leave waste industry incumbents (large insurance companies, opaque PBMs, overpriced hospital networks).
✔ Create custom health benefits plans with direct contracts and value-based care.
✔ Use delivery via PBM to ensure transparency in drug pricing and reduce costs.
✔ Eliminate middlemen that increase costs without improving care.
✔ Negotiate like a CFO – Treat health care as a business expense, not a sunk cost.

Wrong approach: Cost transfer is not the solution

Over the years, businesses have responded to the rise in health care costs by pushing their financial burden to their employees (higher deductibles, increased out-of-pocket expenses and restrictive networks).

But a workforce buried in a chronic condition of medical debt, avoiding care or not receiving treatment is not a productive workforce. Instead of asking
❌ “How much more can we get employees to pay?”
We should ask,
✅ “How much can you save by buying healthcare smarter?”

A trust method for health care purchase

Just as CFOs never let companies overpay raw materials, CHBOs never let companies overpay health care.

This means adopting a modern, trusted-driven healthcare procurement strategy, such as:

✔Transparent pricing and direct contract with high-quality providers.
Through PBM eliminates the pricing and discount traps.
✔ Advanced primary care and on-site clinics to reduce inpatient and emergency rooms.
✔ Customizable health plans that suit the company's labor needs, rather than some level of insurance company plans.

The best companies don't tolerate any other major expenses inefficiency, so why should health care be different?

Call for action: It's time to act boldly

The legal risk of ignoring health care procurement has never been more high.

Companies that embrace CHBO leadership and trust-driven healthcare purchasing will gain a huge competitive advantage. They will reduce waste, provide better benefits and attract top talent.

A company that sticks to the status quo? They will continue to pay, face lawsuits, and struggle with rising costs.

Manufacturing is returning to the United States. But without repairing the broken health care system, we have the potential to expel it again.

Now is the time to lead boldly. Now is the time.

Matt McCord, MD, is anesthesiologist and founder Useless solutions for opioids and benesan.orghelp employers resolve overprescriptions while modernizing health benefits purchases