Skyrocketing health care prices are an increasing challenge for businesses of all sizes. In a recent survey of more than 1,600 employers by Lockton, the world’s largest privately held insurance brokerage firm, nearly 85% of employers said surging healthcare prices are their biggest benefits challenge. And small businesses are seeing big impacts from out-of-control health care prices. A new survey of 1,016 small businesses conducted by Small Business for America’s Future found that small businesses are reaching a critical breaking point and share widespread support for substantive reform across political lines.
Health Care Expenses Are a Big Problem For Small Businesses
Health care expenses rank as a top policy priority for small businesses, which is no surprise given that 90% experienced premium increases last year. In fact, 81% report that health care expenses impact their bottom line, actively hindering business growth: 34% of employers are delaying growth opportunities, and 27% are postponing hiring.
Unhealthy Markets Are an Underlying Cause of High Prices
Researchers at the RAND Corporation “found that Hospital mergers — market consolidation — can lead to health care price increases of anywhere from 3% to 65%[, and the] FTC’s director of the Bureau of Economics has said hospitals that merge may charge 40% to 50% more than if they hadn’t merged.”
Small business owners have noticed. 92% of small business owners say the current health care market is problematic, with 67% believing it’s “not working at all and needs a major overhaul.”
Texas voters also want action to restore competition to health care markets. In a recent statewide survey of Texas voters, 75% said the Texas state government should more actively regulate health care mergers to ensure the market remains sufficiently competitive.
Mystery “Facility Fees” Are a Symptom That Needs Immediate Treatment
Through increasing mergers and acquisitions, what were formerly independent doctor offices and clinics are increasingly part of large medical systems. “Between 2012 and 2024, the percentage of doctors employed by hospitals or health systems more than doubled to 55 percent,” according to a recent PBS News report. And as these practices become consolidated, patients begin to see charges for expensive facility fees associated with large, complex medical campuses like research hospitals and emergency rooms.
Small business owners see these facility fee charges as a major problem that needs to be addressed: 94% of small business owners say it’s important for hospitals to clearly disclose facility fees before care is provided.
The Texas Legislature Has an Opportunity to Help Small Businesses
Several bills before the Texas Legislature would positively affect health care markets in Texas, improving competition and lowering prices. Senate Bill 1232 and House Bill 2556 in particular would directly address the growing problem of opaque and mysterious facility fees by simply requiring providers to indicate the actual location where services were provided and giving advance notice before beginning to charge new fees.
This basic transparency would go far in eliminating waste, fraud, and abuse in health care billing and help patients avoid expensive surprises when they schedule routine health care visits. It would also help address major concerns facing small business owners and help remove barriers to job creation and economic growth in Texas.