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Hospital prices, not insurance rates, may be cause of increased cost strain on consumers

The gap between health insurance costs and workers’ wages has widened significantly, sparking concerns about healthcare affordability and prompting a debate over whether hospitals or insurance companies are responsible for the rising costs. Research from Rice University’s Baker Institute for Public Policy indicates that hospital prices have increased faster than insurance premiums or professional services, with hospitals maintaining higher profit margins. The study also highlights the impact of hospital monopolies on prices and criticizes hospital management for high charges post-Covid. Click here for article.

  • Rising Hospital Prices: Hospital price indices increased faster than insurance premiums or professional services between 2006 and 2023.

  • Public Perception vs. Reality: While the public and physicians largely blame insurers for rising healthcare costs, the study finds hospitals to have higher profit margins and greater price increases.

  • Monopoly Impact: Hospitals with monopoly power in their local markets charge 12.5% more than those in competitive markets, with prices rising by 6% after mergers.

  • Post-Covid Inflation: Despite claims of increased costs due to post-Covid inflation, hospitals are charging prices significantly above their costs, burdening American workers.

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