On Tuesday, the House Ways and Means Committee will seat the chief executives of America's largest health systems and ask them to explain why health care costs keep climbing. Chairman Jason Smith and his colleagues should put a sharper question to the witnesses: what will it take to restore competition in hospital markets and affordability to American consumers?
America is in the grip of a health care affordability crisis. Employer plan costs are projected to rise faster than at any point in 15 years. By 2032, the typical family could spend nearly 40 percent of household income on health insurance alone, up from 20 percent this year. This is unacceptable.
The single biggest reason is hiding in plain sight: the hospital across town has been quietly swallowing up its competitors.
In 1970, about 90 percent of U.S. hospitals stood on their own. Today, only one in five does. Eight in ten hospitals are now part of a consolidated system, and those systems control 93 percent of acute care beds. One or two systems control the entire inpatient market in nearly half of America's metropolitan areas. A full 97 percent of hospital markets are uncompetitive according to federal antitrust guidelines.
Roughly one in four U.S. physicians worked for a hospital in 2013; today, nearly four in five work for a hospital or another corporate entity such as an insurer. And when a hospital buys a physician's office and rebrands it as a "hospital outpatient department," Medicare pays more for the same service, while patients pay facility fees of $75 to $100 for the same care, in the same exam room, from the same doctor. None of this makes anyone healthier. All of it makes care more expensive.
This is not a functioning market. It is a patchwork of local monopolies where patients, employers, and taxpayers are paying the bill.
The consequences are measurable and severe. Hospital mergers in concentrated markets raise commercial prices by 20 to 40 percent, with no improvement in mortality, quality, or patient experience. Market power leads to higher prices that translate into more spending.
Hospital care is the single largest category of health spending — 31 percent of every health care dollar, or roughly $1.8 trillion in 2025 — and it is rising faster than wages or general inflation. Insurers build those costs directly into next year's premiums. For the family writing that check, consolidation is a tax.
The Trump administration has started using the tools it already has to restore competition. In February, the Department of Justice and Ohio's attorney general sued OhioHealth for using "all-or-nothing" contracts to force insurers to include every one of its facilities in their networks - blocking payers from designing lower-cost, budget-conscious plans. In March, DOJ brought a similar Sherman Act case against New York-Presbyterian, the dominant system in New York City.
DOJ and the FTC should continue to aggressively use their authority against anticompetitive conduct and, where warranted, unwind the mergers that produced today's local monopolies.
But Congress must do its part. For too long, lawmakers have been pouring hundreds of billions of taxpayer dollars into ever-larger premium subsidies to insurers instead of expanding competitive markets that would lower premiums and premium subsidies.
Tuesday's hearing is a chance to change that. Three reforms would make a meaningful difference, and Ways and Means has jurisdiction over all of them.
First, pass the Healthy Competition for Better Care Act. The bill, introduced by Rep. Jodey Arrington, prohibits the anticompetitive contract terms - anti-steering, anti-tiering, and all-or-nothing clauses - that DOJ is now forced to challenge one defendant at a time. CBO scores it at nearly $5 billion in savings.
Second, stop rewarding size. The 340B drug discount program, originally created to help safety-net hospitals care for low income patients, has grown more than sixfold since 2010 to more than $80 billion. Much of that money flows to large nonprofit systems that provide little charitable care while using 340B margins to acquire more physician practices, fueling the very consolidation that raises prices everywhere else. Congress should require hospitals to meet a meaningful charitable-care threshold to qualify for 340B and tax exempt status, while aligning reimbursement more closely with acquisition costs.
Third, expand supply. Current law bars new physician-owned hospitals from receiving Medicare payment - suppressing competition. Evidence consistently shows these facilities deliver strong clinical outcomes at lower prices. The ban should be lifted, and Congress should similarly clear the runway for ambulatory surgery centers and other lower-cost sites of care.
These reforms rely on the basic rules of competition that work in every other sector of the economy: when markets concentrate, prices rise; when incumbents are forced to compete, prices fall. The hospital sector is not exempt from this logic it has just been insulated from it.
When the CEOs sit before Ways and Means on Tuesday, they will defend the current system. Congress should not. More taxpayer subsidies funneled to the same consolidated players who drove prices up in the first place will not deliver affordable coverage, competition will. The administration has started the work. It is time for Congress to finish it.
Joel C. White is the President of the Council for Affordable Health Coverage.
