When CEOs from the nation’s leading health insurance companies were recently called before Congress to explain rising premiums and patient costs, it sent an important message that health care affordability is a matter of public accountability. But if lawmakers are genuinely committed to addressing why care in the United States is so expensive, that scrutiny cannot stop with insurers. The CEOs of major hospital systems should also be required to testify.
Hospitals are now the single largest driver of health care spending in the United States. Roughly 40 cents of every dollar goes to hospital care, and decades of economic research show that rising prices, not increased utilization, are the primary reason costs keep climbing. Commercial insurers often pay hospitals two or even three times what Medicare pays for the same services, with enormous variation across regions that has little connection to quality or outcomes. In practical terms, hospitals charge what market power allows.
Yet hospital executives are rarely asked to publicly explain how their pricing strategies align with claims of financial hardship. This imbalance matters. Insurers face constant political pressure and oversight, while hospital systems, many of them nominally nonprofit, have quietly consolidated into regional monopolies with limited accountability.
Spending priorities raise additional questions. Across the country, including in New York, major hospital systems offer luxury patient suites, concierge-style services, and VIP amenities designed to attract wealthy patients and donors. These offerings include private living rooms, gourmet meals, dedicated staff, and hotel-like accommodations. They do not improve clinical outcomes, but they do increase operating costs and reinforce a tiered system of care. At the same time, hospitals argue that they cannot afford to lower prices, hire more staff, or reduce patient debt without threatening their financial stability.
The influence of private equity further complicates the picture. Even when hospitals are not directly owned by private equity firms, they increasingly rely on PE-backed companies for critical functions. Physician staffing firms in emergency medicine and anesthesia, revenue cycle management companies, billing vendors, and collections agencies are now frequently owned by investment funds. A growing body of peer-reviewed research links these arrangements to higher prices, more aggressive billing practices, staffing reductions, and in some cases worse patient outcomes. Hospitals choose these partners, and those choices shape what patients ultimately pay.
Administrative opacity also plays a role in sustaining high costs. Hospitals continue to rely on outdated, paper-based workflows for referrals, prior authorizations, and medical records. Fax-based systems and manual processes persist not because better alternatives do not exist, but because complexity preserves leverage and shifts burdens onto patients and providers. The inefficiency fuels demand for expensive intermediaries and consultants who profit from navigating the chaos rather than fixing it.
None of this is to deny that hospitals face real challenges. Workforce shortages, aging infrastructure, and uncompensated care are serious issues, particularly for safety-net institutions. But these realities make transparency more necessary, not less. When insurance executives testified before Congress, lawmakers questioned executive compensation, profit margins, pricing decisions, and the impact on patients. Hospital executives should be asked the same questions.
Why do prices for identical services vary so dramatically between hospitals in the same city? How does consolidation affect negotiated rates with insurers and employers? Why do nonprofit systems hold billions in assets while patients struggle with medical debt? How much is spent on executive pay, branding, real estate, and luxury amenities compared with direct patient care? What safeguards exist when hospitals outsource core operations to profit-driven firms whose incentives may conflict with patient welfare?
If Congress wants to credibly claim it is tackling health care affordability, it must examine all major cost drivers, not only the most politically convenient ones. Insurers alone do not determine hospital prices. Hospitals do. And as long as hospital CEOs are treated as benevolent stewards rather than powerful economic actors, reform efforts will remain incomplete.
Requiring hospital executives to testify would not solve the affordability crisis overnight. But it would restore balance to the debate and signal that no sector is beyond scrutiny. Accountability should not depend on which part of the health care system is easiest to blame. If insurers must answer for rising costs, hospital CEOs should as well.
Gerard Scimeca is chairman of CASE, Consumer Action for a Strong Economy, a free-market-oriented consumer non-profit organization he co-founded.
