President and CEO
American Hospital Association
February 18, 2021
Hospitals are doing their part to contain costs, as evidenced by the 1.9% increase in price growth per year on average over the last decade, according to the U.S. Bureau of Labor Statistics. Many have also struggled financially during the COVID-19 pandemic, with an estimated $320 billion in lost revenue in 2020 alone. And yet, hospitals and health systems continue to be there for their communities no matter what and are the only sector that provide life-saving 24/7 care to everyone who needs it. This is reflected in the $660 billion in uncompensated care provided to patients since 2000 and $100 billion in community benefits in 2017.
Unfortunately, RAND ignores the unique role of hospitals and health systems and dismisses rising costs and market concentration in the commercial health insurance industry, which is earning record profits during the public health emergency while spending less on actual care. RAND continues to regurgitate older and flawed “studies,” which may be why they land on a poorly-reasoned proposal to have the government regulate prices. Despite claims otherwise, it is widely acknowledged that Medicare and Medicaid – the two largest public programs – pay below the cost of delivering care. Price-setting would only enrich commercial health insurers at the expense of innovations in care that truly benefit patients.