Wondering Why You Aren’t Getting A Bigger Raise? Could Be Hospital Costs!

If your employer says she’d love to give you a bigger raise but the company simply can’t afford it, there might be one big reason: the soaring cost of health care.

In a column published in Real Clear Health, Dr. Demetrio J. Aguila II says that soaring hospital costs have become a “hidden tax on the middle class.”

He offers some persuasive arguments:

• The cost of covering a family of four through a workplace health plan has passed $35,000. While many blame the rise on insurers, Aguila points to a Rice University study showing hospital costs have increased twice as much as physician services or insurance plans since 2006.
• Hospitals can raise prices so much because they’ve eliminated their competition. Aguila cites nearly 2,000 hospital mergers between 1998 and 2021. Today, the 10 largest hospital systems control nearly one-fourth of the nation’s hospital beds. The largest hospital system by bed count had more operating revenue than Netflix and Uber in 2023, Aguila reports.
• Big hospitals often charge more for services than independent labs and clinics. For example, one study found a hip MRI hip costs 10 times more at a hospital. A colonoscopy can cost $5,000 at a hospital, more than triple the $1,500 charged at an independent physician’s practice.

“Businesses that purchase conventional health coverage have little way to avoid hospitals’ price-gouging since insurers – not the employers themselves – negotiate reimbursement rates, set provider networks, and manage claims data,”  Aguila writes.

One solution? Aguila suggests seeking out independent providers whenever possible.

What about you? Have you received an outrageous hospital bill? Share your story with Voices for Affordable Health.