A healthcare affordability crisis is among us. And while President Trump’s recent healthcare plan announcement appropriately targets high healthcare costs and the need for greater transparency, we can’t have a real conversation about affordability without confronting the biggest driver of those costs: hospitals.
In the last decade, employer coverage costs have increased by 47%, in part due to billing abuses, such as hidden fees charged by hospitals, which, in addition to cutting take-home pay for hard-working patients and limiting business growth for job creators, cost Americans an estimated $240 billion every year in wasteful spending. And government programs end up shouldering unrestrained healthcare prices with your taxes.
Insurance premiums and out-of-pocket costs aren’t a made up number. They reflect the cost of what hospitals charge.
As the number one driver of healthcare costs, corporate hospitals use their market dominance to jack up prices with little to no accountability. If we’re to make a serious run at addressing the affordability crisis, we must also promote hospital competition, enforce price transparency, and implement reforms that stop hidden markups and dishonest billing practices.
Market competition helps keep prices low. But when corporate hospital systems enter a local market and buy up competing hospitals and physician practices, they control the market. In 2023, one or two health systemsdominated the entire market for inpatient hospital care in almost half of all metropolitan areas across the country.
This kind of market dominance allows hospital systems to hand pick the price – and they cash in on the opportunity. Studies show that on average, hospitals mark up prices by 300%. In most cases, patients don’t even have another hospital to go to.
What’s worse, while patients pay much higher costs, the care they receive doesn’t improve. In fact, in recent years, 70% of U.S. physicians are now employed by hospitals or other corporate entities. After a physician’s office is acquired by a hospital system, the hospital can charge extra facility fees or site-of-care charges. On average, these hidden fees increase prices by 14% after acquisition. Put simply: a patient gets charged significantly more for the same service and at the same location, all because the facility is now owned by the hospital. As cost of care gets more expensive, premiums and out-of-pocket costs increase too. The result? Higher costs for the same care.
If we want to have an honest conversation about affordability, we need to get far tougher when it comes to hospital monopolies. Competition and cost comparisons are a few proven ways to bring prices down, yet we’ve allowed consolidation to run rampant.
At the same time, we need reforms that actually make hospital prices transparent and put an end to their excessive markups. Right now, hospital bills often have little connection to the quality or value of care patients receive. We’ve tried reform before, but without real accountability, they’ve gone nowhere. This time, new laws must be paired with serious enforcement and meaningful penalties to prevent repeating the same mistakes.
For far too long, patients have been in the dark about why healthcare costs so much. It’s time to shed light on what is really driving unaffordable care and demand action for change.
Hospitals should be a place for quality care, not the source of financial ruin. After decades of consolidating power and profiting off the most vulnerable patients, it’s time for hospitals to be held accountable.
Adam L. Buckalew is senior advisor for Better Solutions for Healthcare coalition and a former senior committee staffer in both the U.S. Senate and House of Representatives.
