Skip to Main Content
09.15.2022 / Press Release

New report: Hospitals’ high fees, misaligned incentives are bleeding families dry 

WASHINGTON, DC – A new Families USA paper indicates that although hospitals provide lifesaving services and jobs essential to the U.S. health care system, their role in the economy has shifted in shocking and detrimental ways over the last decades. Bleeding Americans Dry: The Role of Big Hospital Corporations in Driving Our Nation’s Health Care Affordability and Quality Crisis shows the hospital sector has not aligned its business interests with those of the patients they serve and are responsible for getting and keeping healthy. Instead of being community-focused, local charitable institutions, they are now large corporate entities focused on maximizing revenue rather than improving health.

Because Congress has the power to take the next steps in tackling these issues head on, Families USA also sent a letter today to Senate and House leadership. It recommends implementing policies that rein in abusive health care prices and make health care more affordable and redesigning the economic incentives of the health care sector to align with the needs of consumers and families.

“This paper exposes how the corporate hospital business model has fundamentally transformed into one that favors monopolies and setting high prices at the expense of our health,” said Frederick Isasi, Families USA’s executive director. “It’s time for us to address these pricing abuses head on to end the high hospital costs that are endangering families’ health and economic security.”

The industry’s misaligned incentives and unchecked power are key drivers of why too many people in America cannot afford health care. The paper indicates that since 2015 hospital prices have increased as much as 31 percent nationally, now accounting for nearly one-third of US health care spending and growing more than four times faster than workers’ paychecks.

Nonprofit hospitals already profit substantially from their tax-exempt status, yet many still charge exorbitant prices and their CEOs rake in multimillion-dollar salaries every year on the backs of America’s families.

Seven of the ten most profitable hospital systems in 2016 were nonprofits – each earning more than $163 million in operating margins from patient care. Just two years later, eight of the ten highest-paid CEOs at nonprofits were from large health care corporations. In addition, more than 80 percent of nonprofit hospitals and health care systems spend less on charity care and community investment than the amount they receive through their tax breaks as nonprofit institutions.

In order to build a system that is affordable, economically sustainable and aligned with families’ needs, the paper recommends elected officials redesign the economic incentives of the health care sector, rein in fee for service pricing abuses and increase price transparency. It also urges building a consumer movement around approaches already underway, including fully implementing the No Surprises Act, expansion of site-neutral payments and increasing the number of states with cost and affordability boards to contain rising hospital prices.

The paper is the second in a series on the organization’s People First Care initiative – which lays out a vision for making the American health care system more affordable, less complicated and focused on patients.

 ###  

Families USA, a leading national voice for health care consumers, is dedicated to the achievement of high quality, affordable health care and improved health for all.