Hospital Competition Takes Center Stage at House Hearing

Americans are clamoring for relief from soaring healthcare prices.

Thankfully, Congress seems to be looking in the right place for the answer.

Last week, members of a House Judiciary subcommittee heard testimony on "the effect of mergers, certificate of need laws, regulations, vertical integration, and fraudulent insurance practices on healthcare access and affordability."

The message coming out of that hearing couldn't be clearer.

Hospitals sit at the center of America's healthcare affordability problem. And without targeted efforts to bring greater transparency and competition to the hospital market, lawmakers will struggle to lower prices — and calls for more affordable healthcare will remain unanswered.

Hospital care accounted for nearly a third of all U.S. health spending in 2024.

And as Dr. Brian Blase, president of the Paragon Health Institute, noted in his testimony, hospital-service prices rose 281% between 2000 and 2025 — more than triple the rate of overall inflation.

Those increases cannot be explained by rising use alone. Indeed, according to Blase, hospital admission rates fell from 2000 to 2024 — a trend one would expect to put downward pressure on prices.

So what's driving hospital prices higher? Two missing ingredients of a well-functioning market stand out: usable price information and meaningful competition.

Consider price transparency. Since 2021, federal rules have required hospitals to publish prices online so patients can compare costs before receiving care.

The Trump administration moved to strengthen those rules last year, and the Centers for Medicare and Medicaid Services (CMS) began enforcing new requirements this April that make hospitals disclose more usable, dollar-denominated prices.

Yet compliance remains weak.

A report released this month by PatientRightsAdvocate.org found that fewer than half of the 2,000 hospitals it reviewed were fully compliant, and only 18% posted actual dollar-and-cents prices for at least half of the items and services in their files.

As Blase told lawmakers, meaningful competition is impossible when buyers cannot see prices. Hospitals that obscure what they charge face less pressure to compete on value.

But better pricing information can only do so much to make hospital care more affordable. Patients also need choice — and real alternatives.

Brian Miller, a physician and health policy scholar at Johns Hopkins University and the Hoover Institution, told lawmakers at the hearing, "Monopoly and its younger cousin, consolidation, remain a serious, pressing, persistent concern" in our healthcare markets.

No place is this more apparent than in the hospital sector.

Years of consolidation have left many communities with little real choice. In 2024, one or two health systems controlled the entire inpatient market in 47% of metropolitan areas, and 80% of metro hospital markets had either become less competitive since 2015 or remained under the control of a single system.

That concentration has consequences.

Miller cited research finding that prices for services provided by acquired physicians rose an average of 14.1%, while same-state cross-market hospital mergers increased prices at acquiring hospitals by 7% to 9%.

Nor is there clear evidence that patients reliably receive better care in return.

Federal policy often reinforces consolidation.

Medicare generally pays more for the same outpatient service when it is delivered in a hospital outpatient department rather than an independent physician office.

That gives hospitals an incentive to acquire practices, since the same services can command higher Medicare payments once billed through a hospital outpatient department.

Site-neutral payment reform would reduce that advantage. CBO estimates that applying site-neutral rates more broadly could reduce federal outlays by about $157 billion over a decade.

The Charlotte hearing pointed toward a straightforward agenda: make hospital prices visible, remove government incentives that reward consolidation, and give patients more places to turn when one provider charges too much.

Markets work when consumers can compare prices and choose among competitors.

Healthcare should be no exception.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Healthcare Policy at the Pacific Research Institute. Her latest book is "The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It." Follow her on X @sallypipes. 

https://www.newsmax.com/sallypipes/markets-consumers-prices/2026/09/21/id/1270166/