Large hospital–based health systems are the largest factor by far, in excessive health spending growth, even more than the drug companies, although they also play a role. A new Kaiser Family Foundation brief provides more ammunition for a serious crackdown on abusive hospital practices–forced divestiture of hospitals, physician practices, etc.; forced reductions in administrative staff and executive compensation and other measures to make them more efficient and less expensive. Between 2022 and 2024, hospitals accounted for 40% of health spending growth, far more than any other category. The next highest category was physician and clinical services, at 22%, followed by prescription drugs at 11%.
I would note that this understates the contribution of hospitals, which generally own these huge systems which include almost every kind of health care provider. They own those physician practices, nursing facilities, labs, pharmacies, home health agencies, surgi-centers and so on. And other research has shown that these hospital systems charge much higher prices for the services provided by these other providers types that they own. Much of the spending growth was driven by higher prices and some by more utilization of hospital services. We won’t solve the health spending issue until we completely reform hospital administration and care. (KFF Brief)
My husband was once with a private physician group. Insurance companies would meet with him. He would explain that his group was saving patients and the insurance company money. The insurance agent would say, yes, but we don’t really look at that. We negotiate more with the hospitals. Eventually this drove the private groups out of business. They couldn’t compete on purchasing power, hiring salaries and benefits, nor on Insurance. The hospitals created an arms race competing for specialists, monopolized care, and now here we are. They overcharge, operate inefficiency, and turned patient care into a business. They are so greedy and are going to have to be broken up.
Trumps proposed solution to give the consumer the choice on health care by direct payments will let the market solve the problem
Once a health care consumer can price the service the providers will be forced to compete. No regs needed