Carmel business owner: monopolized hospital systems are major contributing factor to rapidly rising health care costs

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Dear Editor:

As a business owner, I need the U.S. healthcare system to succeed. The health of employees is the lifeblood of any business.

Unfortunately, I am afraid that our healthcare system is failing some of us. While researching healthcare costs, I have found stories about low-quality services for significantly higher prices, and even the statistics showing that U.S. per capita healthcare spending is more than twice the average of other “wealthy” countries.

It is no surprise that open government spigots have turned America’s healthcare system into one big money grab. Businesses, like my own, are paying more money than ever to give workers quality healthcare, everyday Americans are paying more individually for insurance than ever, and most of us now live at the whim of consolidated hospitals that have little to no competition in many markets.

Despite all that, we absolutely need hospitals. COVID-19 proved that hospitals are more critical to our communities than ever. However, the hospital business model has evolved over the past several years. Some of these once-charitable institutions serving the sick have slowly transformed into corporate powerhouses, prioritizing revenue over health.

Hospitals maximize revenue by providing as many services as possible for the highest prices possible. While that may be a smart business tactic, it converts patients from people in need into sources of profit. Many corporate hospital systems have maximized revenue by eliminating their competition through acquisitions. Once a hospital system dominates an entire market and monopoly control is solidified, as in any business, hospitals are positioned to set and control patient pricing unchecked. What’s terrifying is that one study found that more than 1,600 hospitals have merged in the past decade alone.

In Indiana, we’ve seen smaller hospitals consolidate and once-independent practices be taken over by big hospitals. In many businesses, this kind of consolidation would create efficiencies that produce savings for the companies, but anyone who has ever visited a hospital or seen a doctor knows that healthcare is not just any business. Healthcare prices have risen in conjunction with increased consolidation rates, with hospital prices alone spiking 31 percent since 2015. Today, hospital prices account for nearly one-third of all U.S. healthcare spending, a rate that has grown four times faster than workers’ paychecks.

Major hospital systems can also exploit their monopoly power to apply unnecessary ‘fees’ to patient bills. This shady revenue-driving tactic is known as dishonest billing, which occurs when hospital systems acquire independent physician offices and begin tacking ‘hospital facility’ fees onto physician bills, despite those services not being delivered in a hospital setting.

Typically, hospitals justify ‘facility fees’ on hospital bills due to the high costs of operating a hospital campus. But with dishonest billing, patients who never stepped foot onto a hospital campus can be billed as much as 10 times more than what was charged prior to the hospital system purchasing the doctor’s office, despite receiving the same treatment, from the same doctor, in the same setting.

Understandably, dishonest billing is hard to track since patients themselves often don’t recognize the billing errors, but simple legislative solutions such as restricting dishonest billing could reduce healthcare spending by nearly half a trillion dollars over the next decade. We need our legislators to step up and call out the abuse of power that has become all too common in our healthcare system. Supporting legislation that cracks down on predatory billing practices is a step in the right direction.

Our healthcare system needs to re-instill the sense of community and charity that has since been sacrificed in the name of profits to restore Americans’ access to quality, affordable healthcare.

Ryan Allio
Carmel