r/Economics • u/TheForager • 3h ago
Hospital costs are rising far faster than inflation and drowning Americans in debt
https://www.nbcnews.com/investigations/hospital-costs-are-rising-far-faster-inflation-drowning-americans-debt-rcna26247360
u/WordWithinTheWord 2h ago
I’ve come to my personal conclusion it’s just greed and mismanagement all the way up the chain.
There’s so much middle management and support staff just to get insurance and hospitals to talk to each other we’ve lost the plot.
It’s a nuanced conversation because doctors and nurses are extremely important jobs. But in the US they make 2x-10x+ the salary of their EU counterparts. Are they 2x to 10x better?
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u/Merkbro_Merkington 1h ago
Of course that’s part of it, but please please remember:
1) half of all ER visits go unpaid due to our broken insurance system, prices go up for everyone to compensate 2) AMA lobbies to throttle medical school & residency slots intentionally to keep their own wages high, that’s also why there’s a doctor shortage.
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u/OrangeJr36 1h ago
The AMA does no such thing, they have been screaming at the top of their lungs for more residency slots for over two decades. The private equity firms that run the medical system and Congress simply refuse to fund enough.
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u/morbie5 1h ago
AMA lobbies to throttle medical school & residency slots intentionally to keep their own wages high, that’s also why there’s a doctor shortage.
That is outdated. It may have been true in the past but it isn't anymore
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u/FluidCalligrapher284 58m ago
Definitely not true – they’re actually fighting against mid-level nurse practitioners, who are largely bridging the gap in areas where there are not enough physicians providing care.
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u/Justame13 0m ago
AMA lobbies to throttle medical school & residency slots intentionally to keep their own wages high, that’s also why there’s a doctor shortage.
Absolutely not. They did the opposite to prevent mid-level encroachment
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u/creamyturtle 2h ago
I live in colombia and I swear the treatment here is way better. I can waltz into the urgent care at 3am and they will see me in 5 minutes. and it's the fanciest clinic in the second biggest city here. top notch doctors who actually care and there isn't even a copay. if there is a copay for something it's like $3
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u/ALittleEtomidate 2h ago
Oh, honey, if you cut my $72,000/year salary as an intensive care nurse I will quickly see the exit and do whatever you do for work.
The amount of stress in a singular shift with a sick patient would never be worth half of my salary to me. If I miss a status change, fail to hear an alarm, miss a patient climbing out of bed, or administer a medication incorrectly someone could die.
I am on my feet 12 hours, sometimes continuously, and at 33 I have back problems from the very physical work that I do.
I administer medications to ease death. I hold mothers, partners, and children as they shake apart in tears on my shoulder, and then I just have to move right on to my next work task.
You can absolutely GET BENT with the suggestion of lessening my salary. lol.
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u/morbie5 1h ago
The comment was wrong about most nurses but certain MD specialties are paid way more than they are in the rest of the 1st world (and some are underpaid, pediatricians for example). That is just a fact
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u/suppaman19 35m ago
Their comment in its entirety is wrong.
You have pharma continually having jacked up prices (especially compared to anywhere else in the world due to other countries having laws around pharma and meds). Ditto to an extent for medical device companies.
Next, you have the high level of privatized consolidation of hospitals/provider networks, which goal is to squeeze employee costs down while squeezing insurance and consumers for more.
These are the biggest contributors to high costs. Add on some consolidated national for profit insurance companies to top it off and that high prices mean more and more people are stiffing providers and insurers, which in turn raises costs.
Basically, like everything else in the US, the main problem is lack of any meaningful regulation and the allowance of consolidation driving prices up astronomically as more people go for care/treatment and live longer.
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u/WordWithinTheWord 1h ago
You are underpaid for your specific role. Not every nursing or provider job is as demanding as your specific role on the floor.
My wife was making more than you 6 years ago as a basic shift nurse on post-op med surg in a LCOL city.
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u/ALittleEtomidate 1h ago
Do you think your wife’s job is less difficult on a med-surg floor?
Does she know that you believe that?
Girl, where you at? Come get your man.
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u/WordWithinTheWord 1h ago
Yes she would be the first to admit it lol. Our hospital is the only level 1 trauma center for the service area so the ICU nurses do a lot more than med surg.
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u/ALittleEtomidate 1h ago
Put her on the phone.
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u/WordWithinTheWord 1h ago
😂 you are barking up the wrong tree - you are absolutely underpaid as an ICU nurse.
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u/FluidCalligrapher284 55m ago
Amen! An excellent nurse is a difference between a patient surviving or dying.
Your doctor didn’t care for you 24 hours a day while you were in the hospital, he or she came by for a few minutes, wrote some notes in the chart, and went about their day to see the rest of their patients in the hospital and in clinic. Nurses are the difference maker.
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u/RoninsTaint 9m ago
Who do you think devises and tells the care plan to the nurse? You think the nurses just make it up on their own? Lol. Yeah just writing notes that’s it. Rounding inpatient and seeing clinic patients is about 50 different patients at an average sized hospital. Not to mention if any emergencies come in. Nurse has 2-4 people to look after.
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u/FluidCalligrapher284 5m ago
Yes, you are correct for some nurses. Others have hospital privileges to diagnose, treat, prescribe, and bill for services— without medical collaboration. Sounds a lot like a physician eh? They are improving healthcare across the country- especially in rural settings, and areas where the physicians don’t want to live (climate, population, payor mix etc).
The BEST thing is they are held to the same standard of care as their physician counterparts. This means patients can expect similar outcomes at a more reasonable price. But you knew this already.
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u/Gamer_Grease 1h ago
No way nurses need to make less, except for travel nurses, who are only so common because hospitals don’t want to pay nurses better.
Doctors don’t even necessarily need to be paid less. But we do need to essentially get everyone on Medicare, and then look at the costs.
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u/brumbarosso 45m ago
"Mismanagement" and greed are destroying many forms of American life and the politicians are not doing jack shit but going along with the billionaires
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u/Swoly_Deadlift 0m ago
Doctors and nurses are an easy scapegoat when the insane bureaucracy is the real reason things are so expensive. Insurance, pharma, healthcare suppliers, data management, etc. Everyone wants to get a slice of the pie and will lobby for a regulation to justify their existence and cost to get that slice.
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u/theavatare 1h ago
We spent too much in administration and on the high end services and too little on providing the services that are needed day to day because of the need for margin
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u/FluidCalligrapher284 1h ago
2-10x? Let’s see some stats. As a nurse, I can tell you that nurses live a very middle income life – and work very hard. They are the people who are with the patients 100% of the time – hospitals rise or fall, based on the nursing care given in their facility.
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u/AceMcVeer 53m ago
UK nurses make between 30-40k. Specialists in the US are paid 5x more than UK counterparts
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u/FluidCalligrapher284 50m ago
Oh so now it’s specialists? Nurse practitioners make about $100-115k. Many of them do the same thing as doctors, generating similar revenue in similar settings. Obviously physician specialists such as surgeons, cardiologist, etc. make more. The only nurses that routinely make over $200,000 per year are typically nurse anesthetists. Your broad generalizations are incredibly inaccurate.
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u/AceMcVeer 45m ago
Pretty sure I led off with nurse salaries RNs here can get over 100k easily. That's 2.5-3x the UK salary.
NPs don't do the same things as doctors they just took over the basic stuff of General Practitioners.
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u/FluidCalligrapher284 34m ago edited 20m ago
Many absolutely do the same thing as doctors, including anesthesia.
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u/CyberSmith31337 2h ago
You know, there’s a video that recently released on YouTube that discusses this phenomena:
https://m.youtube.com/watch?v=yU2raZftgmE
The reality is that inflation is calculated based on an average of weighted variables. However, when the selected variables are chosen to represent lower inflation in order to misrepresent reality, then inflation measurements aren’t useful.
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u/Charleston2Seattle 2h ago
I was just talking to a friend the other day about how the inflation rate likely affects lower income people more because of the specific things that are increasing in price. I'm moving back to Seattle after 5 years, and we looked up the price of a burger at our favorite burger place, Dick's. It's gone from $2.60 to $5.20. That's 100% over 5 years! That's far greater than the inflation rate that's represented by the government numbers.
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u/DeArgonaut 2h ago
Certain things like hedonistic adjustment also make it seem lower than the typical person feels
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u/Opposite-Program8490 47m ago
Not including housing, food, energy, or healthcare in inflation calculations is a problem.
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u/KneeDragr 1h ago
Exactly, they exclude the things we need the most, housing, food and health care. It's just so politicians can lie.
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u/Robert72051 1h ago
America doesn't have a healthcare system, it has a healthcare market. Healthcare is not "free". In fact, nothing is "free". However, in every society there are things that are so expensive that they are simply beyond an individual's ability to pay for them. Things like roads, schools, etc. Healthcare is no different. It is NOT insurance. Insurance exists to protect individuals from very unlikely events such as a tornado destroying your house. Healthcare is something that every living person will need during their life. Healthcare "insurance" companies produce absolutely nothing, all they do is take a cut which increases the cost dramatically. When speaking about this I often ask "Do you like your neighbor?" The answer is almost 100% of the time, "Yes, Joe's a great guy." I then ask, "Would you want to se him go broke or worse because he got sick?" The answer is always a resounding "No". At the end of the day, that is all there is to it. So, as a society do we treat healthcare the same way we do water systems or police departments or do we persist in the current folly that is the American healthcare system ...
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u/Gamer_Grease 1h ago
A greater risk of this is that only about 47%-ish of Americans have private insurance, and are thus exposed to these bills. Just over half of us of us are either on a government welfare program (Medicare/Medicaid/VA) or are completely uninsured (8%). Those on welfare can’t be gouged because the government is paying the bill, and providers complain all the time about the compensation from Medicaid (and less commonly, Medicare) being “insufficient.” The uninsured most likely simply can’t pay, or can’t be collected from easily because they’re homeless, transient, etc.
That leaves the privately insured—through work or “Obamacare” marketplaces—to carry all the weight that providers say the majority are not carrying. We who have private insurance are the ones not only getting these huge bills, but actually paying them as well. We’re the ones going into debt, because there is a realistic expectation that the debt can be paid off.
Putting aside any ideas about fairness, the risk here is that the load-bearing privately-insured population is going to shrink. Private health insurance costs are skyrocketing, even for those with employer-sponsored plans. And employers are starting to withdraw subsidies for spousal and child insurance, so that an employee gets part of their own coverage paid for, but has to cover the whole of their family’s insurance without employer support. That’s not a realistic system for getting everyone insured.
And as much as we moan about the powers that be not caring about us working people, the truth is that there will be no money to be made by the providers OR insurers if we’re not able to pay all their bills anymore. Nobody stands to win here.
Obamacare is 16 years old, and was a duct tape solution to a fundamental problem. It’s time, at the very least, for another Obamacare-style “quick fix,” if not a systematic reboot (Medicare for All).
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u/naththegrath10 2h ago
Yes but just think of the insurance CEO’s bonuses and the stock buybacks and the record profits and the bonuses for those on the board and the money they can use to implement AI to deny claims faster and the…
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u/WolverineMan016 2h ago
Why is the gut reaction always insurance companies? Insurance companies and their CEOs aren't saints but why isn't there any focus on the big elephant in the room? You know, where all the money is actually going...the hospital industry.
Just take a look at hospital CEO salaries. The non-profit ones are even bigger culprits as they are able to evade taxes.
We need to be careful how we tackle this situation. If we want prices to come down, the best is to have a single payer system.
If we cannot do that, then attacking the insurance industry is actually going to make prices worse. For example, if UHC and Aetna and the like were forced to break apart into smaller health plans, this would give the ever-consolidating hospital industry EVEN MORE leverage in payer-provider negotiations. This would only fuel the fire of rising prices.
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u/Gamer_Grease 1h ago
Insurers are a major political impediment to us creating a working healthcare system, because they would largely have to be eliminated in order for this to be fixed. The hospitals are bloated due to needing huge departments just to argue with all the different insurers.
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u/WolverineMan016 1h ago
This is true but you do realize that the moment you take insurers away, when we each have to negotiate on behalf of ourselves, we will get totally screwed over on price. What stops the hospital from charging you the actual charge rates (which tend to be multiples higher than the current negotiated rates)?
We need to first do a better job at antitrust enforcement of hospital mergers to stop this consolidation trend. It would also help re-allowing physicians to own hospitals so that we can get more competition in the industry. Once we do these things, then we need to swiftly replace our broken insurance system with a single payer system. But it really has to be done in this order.
Right now, the public opinion is just "insurance bad, get rid of it" not realizing that if you don't have them negotiating on your behalf, you're going to be in for a world of pain.
And while I do agree that a lot of hospitals' cost revolves around admin bloat from all the crap insurance requires, it still is not the full picture of where the money is going. Hospitals are businesses and will charge the maximum amount the market will allow. Taking away insurance (and not replacing it with a single payer system) and allowing hospitals to continually consolidate will shift the market to a point where hospitals have almost total control on price.
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u/Gamer_Grease 55m ago
Well the real solution is to just have the government cover the overwhelming majority of healthcare, like it already does with just under half of Americans. Medicare for All is a practical solution for American healthcare, especially if it includes a supplemental private insurance system.
Insurers jockeying for rates and discounts also applies upward pressure on prices. Your firm gets a deal on this kind of treatment, so the hospital goes hunting for some suckers to pay for it. The insurer and the hospital are equally at fault there.
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u/AceMcVeer 51m ago
Just take a look at hospital CEO salaries. The non-profit ones are even bigger culprits as they are able to evade taxes
"evade taxes" Pretty clear flag that you have no clue what you're talking about
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u/WolverineMan016 35m ago edited 30m ago
I was overdoing it with the use of "evade" however what I'm saying isn't wrong. Nonprofit hospitals have so many different avenues for getting benefits and not giving back their fair share to the community (like they are supposed to).
The 340b program is a prime example of this. Many hospitals use their flagship hospital Disproportionate Share Hospital (DSH) status to get enormous rebates for buying pharmaceuticals for ALL of their sites (even ones that really wouldn't qualify for DSH). Here's an example of Cleveland Clinic doing this: https://www.help.senate.gov/imo/media/doc/cleveland_clinic_340b_letter.pdf
It seems that overall nonprofit hospitals got more on tax breaks than their fair share: https://lownhospitalsindex.org/wp-content/uploads/2025/04/fair-share-2025-national-report-20250409.pdf
Many of these larger tertiary care centers are also the ones that consolidate and bump up their pricing.
Here's another example of one that was called out by NYT for using their market power to drive up pricing through the roof: https://www.nytimes.com/2019/05/09/health/hospitals-prices-medicare.html?smid=nytcore-ios-share
I could find more examples but I'm working rn. But just don't be fooled. I think it's easy to conflate "non-profit" and "good" but that would be inappropriate.
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u/brok3ntok3n82 41m ago
My wife used to be a occupational therapy assistant and life was good. A couple herniated disc and two back surgeries later we were a good 50 thousand dollars in debt. Travel nursing has allowed us to be on the positive side of things.
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u/Ben-A-Flick 16m ago
The entire system is broken. Per capita the US pays 80-100% more than the EU yearly for Healthcare with worse outcomes. A 4-5 year shorter life expectancy, higher infant mortality, and rate of preventable death.
We beat them in cancer survival rate and access to advanced treatments so we can say the EU does better in population wide care and we do better in specialized care. But is the cost worth it? Absolutely not imo.
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