LAWMAKERS SPOTLIGHT HOW HIGH HOSPITAL PRICES DRIVE THE HEALTH CARE AFFORDABILITY CRISIS

The following information was released by the America's Health Insurance Plans (AHIP):

During a hearing of the House Ways and Means Committee this week, lawmakers on both sides of the aisle underscored the central role of hospital systems in driving the health care affordability crisis through anti-competitive consolidation, opaque billing practices and price hikes that far outpace inflation.

Highlights from this bipartisan conversation on unaffordable hospital pricing include:

"Simply put, hospitals are charging an insane amount for care ... Hospital consolidation and mergers that lead to ever-growing market power are fueling the borderline extortionary prices hospitals charge patients ... When hospitals have no competition, it's no wonder that the sky seems to be the limit for prices." Chairman Jason Smith (R-MO)

"Affordability is a problem for everybody. It's the number one issue in America right now. 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)

"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)

When "private equity comes in ... oftentimes, the priority is not patient care, but investor return ... In fact, it's hard to think of a business model less compatible with health care than private equity." Rep. Judy Chu (D-CA)

By The Numbers: Hospital Price Hikes Dwarf Inflation, Drive Up Premiums

As several Committee members pointed out, the evidence is clear: hospital prices have grown far faster than inflation amid rampant anti-competitive consolidation, which has driven up Americans' premiums.

Nearly 300% price inflation: An analysis of Bureau of Labor Statistics data shows that hospital prices have risen 281% since 2000 roughly triple the rate of overall inflation and more than double the growth in wages in that same time period.

Anti-competitive consolidation and unchecked pricing power: Hospital markets are increasingly dominated by a few large systems, with three-fourths of U.S. metro areas classified as highly or very highly concentrated.

The same service, a sharply higher bill: Routine services are increasingly being shifted to hospital outpatient departments, where prices are up to 13 times higher than in independent physician offices, inflating costs without improving care.

Driving higher premiums: Hospital-based care including inpatient, outpatient and emergency room costs accounts for more than 40 cents of every premium dollar in the commercial market.

Common-Sense Solutions Needed to Improve Affordability

Health plans are doing everything in their power to shield Americans from the high and rising costs of medical care and are committed to working constructively with policymakers to advance common-sense, bipartisan policy solutions to lower costs for everyone.