health
February 3, 2026
In the rush to hold insurers to account, don't forget about hospitals
When asked to account for the skyrocketing cost of health coverage before two House committees last Thursday, the chief executives of five of America’s largest health insurance companies pointed fingers.
TL;DR
- Health insurance executives identified hospitals and drugmakers as primary drivers of rising healthcare costs.
- Hospitals represented 31% of U.S. healthcare spending in 2024, while prescription drugs accounted for 8.8%.
- Overall hospital spending grew by 10.6% in 2023 and 8.9% in 2024.
- Hospital consolidation has led to one or two health systems controlling nearly half of metropolitan inpatient hospital care markets.
- Hospitals are increasingly employing or affiliating with physicians, with 47% of doctors now linked to hospital systems.
- Studies indicate increased Medicare spending and higher commercial insurer prices due to services provided in hospital-based settings.
- Vertical integration between hospitals and physician practices is associated with price increases for various medical services.
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