Employer-sponsored health coverage now averages nearly $27,000 a year for a family. These costs are ultimately borne by workers and their families through lower wages, reduced benefits, and rising premiums.
The leading driver of these rising costs? Hospital prices, which have grown faster than inflation and nearly every other sector of the economy, are driven in part by years of consolidation that have reshaped local health care markets.
Fortunately, policymakers and experts are increasingly recognizing the burden this places on employers and families. In recent weeks, bipartisan members of Congress and leading policy experts from across the political spectrum have focused on the same priority: the need to rein in hospital pricing practices and consolidation to reduce healthcare costs.
Here’s what they had to say:
Affordability is the number one issue
“Affordability is the biggest issue in the country, and hospital costs … are a big part of that affordability crisis in our country.” — Rep. Thomas Suozzi (D-NY)
Same care, higher price
“We’re paying hospitals a whole lot more for the same outpatient procedures that physicians conduct with the same outcomes, often with the same, mid-level support. […] Biopsies today, on average, cost about $150 at a physician’s office. It’s $800 at a hospital setting, and there’s a whole list of things, epidural injection, $250 at a physician’s office, $740 because of that HOPD payment.” — Rep. Jodey Arrington (R-TX)
Consolidation and market power
“Patients are not getting better for the higher prices, either. Study after study found that hospital mergers are not generally associated with better health in rural America. Hospital mergers may sustain access in some communities, but I have seen firsthand how profit-seeking health systems view struggling rural hospitals as nothing more than a gateway to more patient referrals.” — Chairman Jason Smith (R-MO)
Higher prices are passed on to patients and employers
“Since 2000, hospital prices have grown nearly 300%, vastly outpacing inflation and wages. In fact, hospital prices have grown more than any other part of our economy, and no one really knows how these prices are calculated. While most individuals are not directly exposed to true hospital prices, these are not just abstract costs in the ether. These costs are passed directly onto patients, whether it’s in the form of cash prices or higher premiums or out-of-pocket costs.” — Rep. Kevin Hern (R-OK)
Nonprofit or for-profit, what’s the difference?
“Do you think there’s much difference in the way hospitals that are designated for-profit operate differently than a non-profit?” — Rep. Lloyd Smucker (R-PA)
“The short answer is no”. — Sam Hazen, CEO of HCA Healthcare
Employers are responding to price pressures
“Unions, like thousands of employers across the country, use price transparency data…to garner information on their premiums. They found New York-Presbyterian charges much higher than Medicare for their care – to be precise, 358% more. After this union dropped New York-Presbyterian from their network, they reportedly saved substantial resources, allowing for more financial flexibility for their members.” — Rep. Brian Fitzpatrick (R-PA)
Experts Across the Political Spectrum Agree
Recent reports from policy experts across the aisle reached the same central conclusion as these lawmakers: Americans pay exorbitant prices for hospital care.
- Yale health economist Zack Cooper noted in a New York Times op-ed that hospital mergers “destroy more jobs in their communities than they create” because “higher hospital prices — and, by extension, higher insurance premiums — make it more costly for companies to keep workers employed.”
- A recent Paragon Health Institute report “argues that U.S. hospitals…operate in a government-shaped system that rewards consolidation, opacity, and inefficiency” – and recommends that policymakers enact “reforms such as site-neutral payment, stronger price transparency and oversight” of subsidies like “340B drug discount windfalls.”
- A new Families USA analysis shows that “the biggest [hospital] systems in the country…use [their] monopolized power to overcharge consumers,” with the data “add[ing] to decades of evidence showing…the more hospital chains consolidate, the higher prices Americans pay.”
- A conservative tax policy expert opined in the Washington Post that “hospitals that operate as sophisticated commercial enterprises while hiding behind a nonprofit designation [should] finally pay their fair share.”
Employers, workers, and families should not be forced to pay more for the same care just because dominant hospital systems use their market share to raise prices. Policymakers should advance reforms that increase transparency, curb anti-competitive consolidation, eliminate unnecessary facility fees, and ensure hospital accountability.