Better Solutions for Healthcare

Axios: Hospitals have a target on their backs

By Peter Sullivan, 11/3/22

After cracking down on high drug prices, Congress is about to turn to an even bigger source of health care costs: hospitals.

Why it matters: Hospitals have gotten off easy until now. But a growing number of advocates and lawmakers say Congress needs to tackle their costs if it’s serious about making health care affordable.

  • The U.S. spent $1.3 trillion on hospital care in 2020, or about 30 percent of all health spending, compared to about eight percent for retail prescription drugs.

What they’re saying: “They just sort of took prescription drugs off the table for a while,” James Gelfand, president of the employer group ERIC, said of Congress. “But the hospital prices have also been growing at an alarming rate. And they are the biggest part of the spending.”

Reality check: No one wants to be the first to hear from their (typically well-connected) local hospital officials about cuts. But the groundwork is being laid, including by groups with a track record of success.

  • Arnold Ventures, the billionaire-funded advocacy group that fought for surprise billing legislation and allowing Medicare to negotiate prescription drug prices, is partnering with employers to target commercial prices — particularly hospital prices.
  • Families USA, the consumer group that helped shepherd the passage of the Affordable Care Act, is now ramping up pressure on hospital prices.
  • The Alliance to Fight the 40, which helped lead repeal of the ACA’s “Cadillac Tax,” has now renamed itself the Alliance to Fight for Health Care and is making lowering hospital costs part of its mission.

What we’re watching: In Congress, House Republicans’ health care task force gave a nod to proposals from Rep. Victoria Spartz (R-Ind.) aimed at cracking down on higher costs at physician offices owned by hospitals. That will be in the mix next year if the House flips.

  • Another of her bills would give the Federal Trade Commission more power over anti-competitive behavior from hospitals.
  • Spartz told Axios she is working with committee staff and House GOP Leader Kevin McCarthy’s staff on her bills.
  • She said she purposely broke her proposals into separate bills and that some pieces could be acted on next year.

In the Senate, Sens. Tammy Baldwin (D-Wis.) and Mike Braun (R-Ind.) have a bipartisan measure targeting anti-competitive provisions of contracts between health insurers and hospitals.