Why do some hospitals charge more than others?
Why do some hospitals charge much more than others? A new analysis from Trilliant Health highlights extreme price differences in general procedures.
No brand – Lifestyle
Working-age Americans who have health insurance through work will soon face unpleasant facts. The biggest health insurance rate since 2010 is rising.
A survey of more than 1,700 employers found that the pace is increasing for an average increase in costs per employee in 2026, according to benefits consultant Mercer. Another report from consultant AON shows that employer health costs will rise 9.5% next year.
Most working-age Americans have health insurance through their workplace, and employers pay for most of the tabs. In recent years, employers have been trying to protect employees from rising insurance costs, said Beth Anland, director of research for health and benefits.
But “this could be a catch-up year,” Umland said, as costs are expected to rise at the fastest levels in a decade and a half.
Mercer’s survey said six in 10 employers are asking workers to escalate their healthcare costs through higher deductions and out-of-pocket payments.
Also, costs are rising at double digit rates for those who have purchased their health insurance through the Affordable Care Act market. Over four million consumers could lose coverage if Congress made the ACA plan more affordable for consumers if they didn’t extend their effective Covid-19 pandemic-era tax credits.
The bad news about health insurance is because consumers face an overall economic crisis. Research suggests that consumer trust is falling in and that car loan defaults and foreclosures are on the rise.
Analysts noted that healthcare costs have slowed down in the first two years of the Covid-19 pandemic, but are rising again.
“The fact that prices seem to be accelerating is really bad news,” said Shawn Gremminger, CEO of Healthcare Purchaser Coalitions National Alliance.
Why are health insurance costs rising?
Mercer said overall healthcare costs have risen as hospitals, doctors and pharmaceutical companies have raised prices. Healthcare workers, such as nurses and X-ray technology, have also been ensuring profitable pay increases in recent years – money health providers are trying to recover by charging more from employers and consumers.
Also, Americans use health care more frequently, Snitt Patel, the US chief actuary for health and welfare.
“About the exact same services as a year ago – visits to doctors – is about 3-4% higher,” Patel said. “The rest is related to greater use of the service.”
Increased spending on cancer drugs and weight loss drugs such as Wegovy and Zepbound has also contributed to an increase in medical costs. Almost all health plans cover GLP-1 drugs for diabetes, but less than half of employers cover these drugs to cover weight loss.
Umland said employers who were reluctant to cover injectable weight loss drugs could be waiting for the market to stabilize. Drugmakers Eli Lilly and Novo Nordisk are both testing pill versions of weight loss pills that may be more attractive to consumers than shots. The companies are expected to seek Food and Drug Administration approval to sell obesity drugs.
How do employers try to delay health spending?
Many employers have changed their insurance offerings to reduce their total spending. Some strategies can rule out or limit hospitals or other providers who charge the best prices.
After making such cost-cutting moves, Mercer Project companies can raise the increase in health merit costs to an average of 6.5% next year.
Workers usually pay health insurance premiums through payroll deductions. Mercer said employees will be able to see a deduction that will increase by 6-7% next year.
However, many employers are trying to shift more costs to employees through higher deductions and out-of-pocket expenses, so employees need to spend more of their money when visiting doctors and hospitals. For example, a $5,000 deductible plan requires you to pay that amount before most coverage begins.
Businesses typically offer workers multiple plan choices during open registration, so consumers must use the opportunity to choose a plan to work for them and their families, Mercer said.
Companies are increasingly offering plans that could coordinate the network of hospitals and other providers based on cost and quality. More than a third of large employers will provide such a coordinated plan next year, Mercer said.
Employers are trying to identify sources of high healthcare costs. According to Gremminger, companies that request data and request data to learn high-cost sources hope to adjust their plans to get better value.
A study by the National Federation of Healthcare Buyers Survey, released on September 9, showed that such employers were pursuing strategies such as signing contracts with healthcare providers and adopting a “tiered network” that bills consumers when they are seeking care at high-cost hospitals and other providers.
“These are all ways to narrow down the network and drive people to a lower cost, high quality hospital,” Glemming said.
Email Consumer Health Reporter Ken Alltucker (alltuck@usatoday.com).
