Hospitals Main Driver in Health Care Cost Increases

By Consumers for Quality Care, on April 6, 2022

Organizations and leaders across the country are pushing to rein in out-of-control hospital prices, according to Axios. Hospital prices vary considerably even in the same market, and rising prices for care are reflected in higher insurance premiums and lost wages.

A union health fund representing service workers in 11 states and Washington, D.C., is calling on New York lawmakers to address these disparities and is considering banding together with other unions to fight for lower health care costs. California Governor Gavin Newsom has called for the creation of an Office of Health Care Affordability to set limits on hospital, physician and insurer costs – and fine those that don’t comply.

The focus on hospital pricing is driven by a growing gap between what employers, unions and private insurers pay hospitals compared with what Medicare pays for the same services. For example, a C-section at private New York hospitals cost between $27,700 to $55,000. At the public hospital system, a C-section is $17,800. The report estimates that the New York City government could be overpaying more than $2 billion.

When hospitals increase prices, it trickles down to consumers through higher premiums and copays. “Hospital prices are the main driver of our costs and U.S. healthcare spending — findings that should direct policy change going forward,” said the report.

CQC urges lawmakers to address rising hospital costs and ensure all patients can afford the quality care they need and deserve.