ALEXANDRIA, VA – Prior to the Senate Finance Committee’s recent hearing on “The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans,” Consumer Action for a Strong Economy (CASE) urged lawmakers to confront the sector that has contributed to America’s skyrocketing health care costs: hospitals. While much of the public debate focuses on insurance companies, drug prices, and federal subsidies, CASE is demanding greater attention be put on the primary source of inflation in health care – hospital pricing power.

CASE contends that hospitals have become the de facto price-setters in American health care. Through consolidation, aggressive acquisitions, and opaque billing practices, large hospital systems control what insurers, employers, patients, and taxpayers pay. Health care prices in many regions are rising far faster than economic growth or medical necessity, yet there is little examination of the institutions that set these rates.

“The consequences for patients and taxpayers are severe,” write CASE officials. “The amount that patients spend on hospital care now represents the largest share of national health care expenditures. Federal programs such as Medicare and Medicaid are forced to absorb higher costs, while rising premiums increase taxpayer burdens. Families are left to choose between financial stability and essential medical care as hospital-driven inflation continues to climb.”

Former FDA Associate Commissioner Peter Pitts stated: “Healthcare in the United States is in a crisis of affordability and accountability. In 2023, Americans spent more than $1.5 trillion at hospitals, accounting for nearly one-third of the nation’s total healthcare expenditures. While attention is often placed on pharmaceutical companies and insurance providers, hospital systems, especially nonprofit institutions, are the primary driver of healthcare cost inflation and systemic inefficiency.”