por John R. Fischer
, Senior Reporter | October 05, 2022
Hospital prices have spiked 31% nationally since 2015: report
Hospital expenses make up nearly one third of U.S. healthcare spending, with prices skyrocketing as much as 31% nationally since 2015.
This increase has been four times faster than growth in workers’ wages and reflects how providers have become large corporate entities focused on building up their revenue streams, instead of caring for patients, say the authors of a new paper by Families USA, a nonprofit, nonpartisan consumer health advocacy organization.
Titled "Bleeding Americans Dry: The Role of Big Hospital Corporations in Driving Our Nation’s Health Care Affordability and Quality Crisis”, the paper attributes the inability of many Americans to afford quality healthcare to the misaligned incentives and unchecked power of hospital business practices around their services and operations.
“This paper exposes how the corporate hospital business model has fundamentally transformed into one that favors monopolies and setting high prices at the expense of our health,” said Families USA’s Executive Director Frederick Isasi in a statement.
The paper claims that nonprofit hospitals already benefit financially and substantially from their tax-exempt status but still charge high prices that allow their CEOs to have multimillion-dollar annual salaries. And over 80% of these health systems spend less on charity care and community investments than the amount they receive in tax breaks as nonprofit institutions.
Seven of the 10 most profitable hospital systems in 2016 were nonprofits that each earned over $163 million from patient care, according to the paper. In 2018, eight of the 10 highest-paid CEOs at nonprofits were from large corporations.
To make care more affordable, the authors recommend lawmakers redesign economic incentives around the healthcare sector to align more with the needs of consumers; increase price transparency; and put in place more controls to curb service pricing abuses.
They also are calling for a consumer movement to push forward implementation of the No Surprises Act, expand site-neutral payments and increase the number of states with cost and affordability boards to cap rising hospital prices.
“It’s time for us to address these pricing abuses head on to end the high hospital costs that are endangering families’ health and economic security,” said Isasi.
The paper is the second in a series written by Families USA for its People First Care initiative, a plan for making the American healthcare system more affordable, less complex and geared more toward patient needs. Back to HCB News