Corporate hospital systems are driving up costs for Californians

Capitol Weekly welcomes Opinions on California public policy or politics. Please read our guidelines for opinion pieces before submitting an Op-Ed. Submissions that do not adhere to our guidelines will not be considered for publication. 

OPINION – Healthcare costs are straining families across California. The cause of this affordability crisis isn’t a mystery – it’s a problem hiding in plain sight, rooted in unchecked corporate hospital systems that put profits over patients.

These corporate hospital systems dominate local markets, jack up prices by an average of 300%, and send patients costly and confusing bills, all while largely avoiding scrutiny for their actions. Here in California, hospitals on average charge patients almost 75% more than what it costs them to turn a profit, which ranks as the second-highest upcharge rate in the country.

In one case, a Stockton resident had surgeries to repair an aortic tear and a ruptured blood vessel in her brain and spent two months at Stanford Medical Center, which hosts one of the leading programs in connective tissue disorders. Over the next 18 months, she racked up more than $4 million in medical bills. Her share was $14,343, thanks to her employer-sponsored health insurance, but she notes that she’d still be paying if not for Stanford’s financial assistance program.

Stanford, like many hospitals, didn’t make it easy for her, though, as it took months of research and persistence on her part before the hospital waived $13,971. Hospitals purposefully make this process confusing and difficult for consumers, all so they can price gouge unknowing patients.

Hospital monopolies aren’t just a problem in California – they’re creating a healthcare affordability crisis for patients across the country, as Americans find themselves struggling with rising premiums and out-of-pocket costs. As the leading driver of healthcare costs, hospitals enact pricing abuses that cost hardworking Americans an estimated $240 billion each year.

In fact, in recent years a whopping 70% of U.S. physicians were employed by hospitals or other corporate entities. Patients whose doctors’ practices are acquired by these corporate hospital systems find themselves facing higher prices for the same quality of care. Through extra facility fees or site-of-care charges, prices increase by an average of 14% when an office is acquired by one of these hospital systems.

California in particular ranks sixth in the country for overall hospital prices as a percentage of Medicare, and in a state with already troubling affordability metrics, we can’t let hospital mergers continue driving up costs for our patients.

So, what’s the solution? You can’t have an honest conversation about affordability without confronting hospital monopolies head-on. Lawmakers have allowed consolidation to explode, and they need to use the most effective tools in their toolbelts to rein it in: competition and price comparison.

In recent years, one or two corporate hospital systems have dominated the inpatient care market in roughly half of the country’s metropolitan areas. If patients have multiple options for care, hospitals will be encouraged to lower prices to competitive rates.

At the same time, transparency reform has to do more than look good on paper. Making sure hospital bills actually reflect the quality and value of care that patients receive is a strong first step in standing up to opaque pricing and confusing markups.

When it comes to hospital monopolies, we must literally lay down the law. One major Los Angeles-based hospital reportedly charges 585% of their commercial breakeven price. This is unacceptable, and accountability can’t be optional. This time, new laws need real enforcement to bring prices down.

If lawmakers are serious about tackling healthcare affordability, it’s time to stop tiptoeing around the real problem. Patients in California and across the country trust hospitals to take care of them at their most vulnerable. Yet in return, corporate hospital systems have capitalized on every opportunity to make a profit, with no regard for their patients’ financial well-being.

Affordable equals accountability – and our lawmakers can’t afford to let corporate hospitals get away with it anymore.

Adam L. Buckalew is senior advisor for Hospital Watch and a former senior committee staffer in both the U.S. Senate and House of Representatives.