It seems like there’s not much the left and the right agree on these days, but when it comes to the problems underlying skyrocketing health care expenses, experts of all political perspectives are converging around the same set of facts: a lack of competition has created a dysfunctional health care market.
At a recent event in Washington, former Obama administration advisor Ezekiel Emanuel and Trump policy architect Brian Blase found themselves largely in alignment on why health care prices are out of control.
“When Werner asked the two ‘what’s at the top of your list of things driving high health care costs,’ Blase pointed to hospitals as the “largest and fastest-growing part of the problem.” Emanuel said that ‘in thinking about solving the affordability problem, hospitals have to be the main focus; they are a third of all care delivery costs.’ Both were in agreement on a suite of aggressive reforms needed — most notably site-neutral payments.”
Last month, the National Taxpayers Union delivered a letter to the Energy & Commerce Subcommittee on Health noting that,
“Hospital markets suffer from a stunning lack of competition. Nearly half of all metropolitan areas across the country had just one or two hospital systems controlling the market for inpatient care in 2022. By 2024, nearly 80% of all doctors across the country were employed by hospitals or other corporate entities.
According to data from the Department of Health and Human Services, hospital-to-hospital mergers in concentrated markets can raise prices anywhere from 6% to 65%. Even when hospitals acquire smaller independent physician practices, prices for identical medical services from those doctors rise on average by 14%.”
And this week, the Center for American Progress released a new report on the health care price crisis stating that,
“Markets in health care are highly concentrated, driving up medical prices and premiums,” and that “Excessive rent seeking by some health insurance companies and large hospitals fuels higher costs and slows wage growth.”
The first step to solving any problem is recognizing that there is one. The strong bipartisan concurrence around the fact that health care market consolidation has resulted in a lack of competition and perverse incentives that are distorting prices upwards creates a critical opportunity for lawmakers to come together and forge common sense solutions to rein in prices, lowering expenses for Texas employers and families.