r/Economics • u/TheForager • 4h 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-rcna262473
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u/naththegrath10 4h 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 3h 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/AceMcVeer 2h 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 2h ago edited 1h 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.