How much do you pay for gas? How much is your electric bill? What about cable?

Those numbers popped into your head right away, right?

Now, about your last hospital bill? How much did you pay for the Band-Aid they used after they drew your blood? Did you know how much your last breast biopsy or hip replacement was going to cost you out-of-pocket before your procedure? Chances are you didn’t.

If you go to a hospital for a procedure, your out-of-pocket costs are rarely discussed. And therein lies the problem. Most patients don’t know how much they must pay for the procedure until they get their bill in the mail months later. 

Why?

Well, in my case, that’s the $8,523 question. (More to come on this a bit later in our story.)

For years, patient advocates and health policy experts have called for transparency in hospital prices to make it easier for patients to compare prices, save money, and avoid financial debt. The goal should be to allow patients to make the best health and financial decisions. Still, most prices are not openly disclosed, and the government doesn’t seem ready to punish the non-compliant.

By Jan. 1, 2021, U.S. hospitals had to make a public list of the standard charges for most items and services. However, according to a January 2023 article in the Journal of General Internal Medicine, most hospitals are not compliant. 

While this lack of transparency hurts all patients, another report says Blacks and low-income patients in rural areas are hurt the most by murky hospital prices.

Rappers unite to push for hospital pricing transparency 

Medical debt incurred from health care costs is an increasing problem for older Americans, especially African Americans and Latinos. African Americans had 2.6 times higher odds of having medical debt than whites, according to this 2016 study. More than half of Black Americans and 50% of Latinos have medical debt, compared to 37% of whites, according to a 2022 Kaiser Family Foundation report. 

Blacks are also more likely to be contacted by a collection agency and to borrow money because of medical debt. In contrast, the study said whites are more likely to use their savings.

Worrying about how you are going to pay for a medical bill is stressful, and it should be the last thing a person in recovery is thinking about as they try to heal.

This kind of stress could be significantly reduced if patients had access to actual prices in health care, according to some of the most iconic men in the hip-hop industry.

Last year, hip-hop heavy hitters Chuck D, Fat Joe, Rick Ross, French Montana, Method Man, and Busta Rhymes joined forces with the nonprofit Power to the Patients to roll out a series of PSAs pushing for affordable and equitable health care.

In one of the 30-second ads, the rappers jointly say, “Today, all across the country, hospitals and insurers hide their prices, and it’s creating fear, debt, and devastation all over this country.”

The video continues: “We need actual prices in health care. Not averages, not estimates. We need real prices … We demand prices and transparency in health care.”

It’s call for elected officials, health care executives, and insurance companies to begin informing patients how much they will have to pay out of pocket.

The push for transparency from some of the most respected rappers is a big deal because the hip-hop community can galvanize young people from different races, classes, and communities together to fight for a cause.

America got a sense of how powerful those young voices can be after the nation watched in disbelief as a video showed a white police officer kneeling on the neck of George Floyd for nine minutes in Minneapolis on May 25, 2020, killing the handcuffed black man. Before he died, Floyd could be heard telling police that he can’t breathe at least 16 times. “Please, the knee in my neck. I can’t breathe.”

After Floyd’s death, young protesters marched in 140 cities across the U.S. to demand changes in law enforcement and an end to racism.

Buildings were set ablaze, a police station was burned down, some police offices were defunded, and some demands were met.

Imagine if the hip-hop community could get even a sliver of that same enthusiasm and demand for justice on hospital pricing transparency.

Technically, all hospitals are supposed to comply with the 2021 federal law. Still, they have no incentive to move beyond a snail’s pace because, since some political officials have already said they should be given time to become compliant. 

A set of regulations issued by the U.S. Departments of Treasury, Labor, and Health and Human Services rolled out in three phases.

• Phase one: Health plans were supposed to publicly post readable files for in-network and out-of-network rates by Jan. 1, 2022.
• Phase two: Health plans were supposed to provide an internet service tool with information on costs for 500 specified items and services by Jan. 1, 2023. 
• Phase three: Expand phase two to all items and services by Jan. 1, 2024.

Most hospitals are not yet fully compliant.

Our hospital billed us for $8,500 over what they told us

The problem with hospital pricing transparency is compounded by the fact that in 2022, 42% of American adults without health insurance skipped medical treatment because they couldn’t afford it, compared with 26% of Americans with health insurance.

African Americans and Hispanics are more likely not to have insurance. Those who are at a higher risk for heart disease, kidney failure, prostate cancer, and asthma? African Americans and Hispanics.

Although my wife and child are on my company’s insurance plan, higher health care and “hidden costs” have made my family hesitant to go to the doctor.

My wife Damia made local news when she posted on Facebook how we received a bill from the hospital for more than $8,500 over the estimated cost of her surgery.

Before Damia had surgery for a parathyroidectomy in August 2020, she asked met with the hospital’s financial counselor  And was told  our out-of-pocket expense would be $1,101.99. 

However, we got our bill for $9,624.99 — that’s $8,523 over what we were told it would cost.

When my wife called the hospital to get to the bottom of the huge discrepancy, we were told Damia was billed for a doctor who was in the room and just watched her surgeon perform the surgery. The doctor then billed the insurance company, and it was rejected because the doctor was out-of-network. Insurance kicked it back to us, resulting in an outrageous bill.

This immediately made me think of “The Junior Mint” Seinfeld episode, where Jerry and Kramer joined medical students in a hospital operating theater to watch one of Elaine’s ex-boyfriends get a splenectomy. Kramer moves for a better view and even issues a “Psst!” at the surgeon because he could not see.

My wife couldn’t give consent to the arrangement in the room because she was under anesthesia, and the assistant who “watched” the surgery was not even in our network.

When local news picked up on the story, they interviewed my wife. They called the Medical College of Wisconsin asking about the case, and the hospital quickly said they cleared it up. The embarrassment caused the hospital to pay the observing surgeon’s cost and the entire bill.

“Even if you are awake and you say, Who is this other person, they say, Well, this person will be assisting me. Do you know to ask at that moment, ‘Hey, before you cut me open, is this person covered under my insurance?’” Damia told the Milwaukee station WTMJ-TV.

“How are we as patients supposed to be able to advocate for ourselves if there’s information we don’t know?” she asked.

Imagine if the hospital would have pulled this stunt on someone who didn’t know the power of the pen. This unexpected bill would have crippled most in my hometown of Milwaukee. For a city that has one of the poorest African American populations in the country, this bill could have been catastrophic.

The bottom line is that there is no reason not to have hospital pricing transparency. And those prices need to be established upfront — the price for a procedure shouldn’t change depending on who pops into the surgery room while a patient is under the knife.

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Fast forward to 2019! The lead author of that report, Gerard Anderson, a professor of health policy at Johns Hopkins University, revisited their work as a tribute to Reinhardt with a new study: “It’s Still The Prices, Stupid: Why The US Spends So Much On Health Care.” Anderson and colleagues found that their original thesis, which Reinhardt talked about so much, “remains valid.” It’s the prices charged for medical services that drive the exorbitant cost of U.S. health care. They noted, however, that the difference between what public insurers like Medicare and Medicaid pay and what private insurers like Blue Cross and Aetna pay had become wider in 2016 when they reexamined the data, an ominous sign suggesting providers now had more market leverage to raise their prices after consolidation. The authors also argued that lowering prices would need to start with pushback from insurers and self-insured corporations — a daunting task in America of 2021.

In a late August interview, Anderson explained why. “It’s the inability of private insurance to negotiate effectively. They have no ability, no desire, and not much interest” in doing that. They simply raise their premiums with little or no pushback on the hospitals, which are calling the shots and increasingly engage in surprise billing and upcoding practices that leave patients with unexpectedly high out-of-pocket costs. Indeed, the consolidation of hospital power all across the country and steep rise in prices may be one of the most underreported health policy stories of the day. Hospitals and insurers both have the ability to keep prices high with little pushback from government officials, the public, or the press.

Whether it’s Cleveland, Pittsburgh, Northern California, Washington, D.C., New York City, Charlotte, or Boston, major hospitals in those areas have only grown bigger over the past decade, Anderson says, as competition wanes. “They are more powerful than ever to set the price. When you can set the price, you do set the price, and it keeps rising. In any metropolitan area, the story is the same.”

“Hospitals are definitely privileged in part because they provide charity care and necessary services, but now most are more profit-oriented, and the public hasn’t caught up with the reality of what they’ve become,” he added. Anderson explained that all players in the game have “incentives to keep prices high and only a little incentive to negotiate slightly lower prices. There’s very little competition. It’s not a dynamic market.”

In other words, price competition that might lower the cost of hip surgery or treating pneumonia is scarce, but there are plenty of ads splashed on TV to promote the hospital’s burgeoning brand. Meanwhile, there’s no check on continuing hospital consolidations from government regulators.

That’s partly because federal and state antitrust laws are not up to the job of tackling the hospitals’ practices, says Dr. Paul A. Hattis, a retired professor at Tufts University Medical School in Boston. “Statutes, case law and federal regulatory pronouncements by the Federal Trade Commission and the Justice Department have so far failed to stop such practices. They are inadequate for the challenge to stop anti-competitive health care practices.”

The metamorphosis of the nation’s hospitals into ever-larger conglomerates began years ago, with Massachusetts leading the way. The state, which sparked the move to managed care and where Romneycare inspired the Affordable Care Act, also set in motion a pattern of hospital consolidation and expansion that began in the mid-90s in Boston, with hospitals such as Massachusetts General and Brigham and Women’s Hospital. They joined forces and created Partners Health Care, furnishing the template for what has grown into a national phenomenon today, with huge implications for what Americans and the government will pay for care. Massachusetts is once again a bellwether for the country.

It’s instructive to understand some history from the Bay State to comprehend what’s happening to hospitals in your own area and how they drive local health care costs. Back in 2008, the Boston Globe reported that Partners HealthCare, the state’s largest health care system, had cut a “quiet deal” with Blue Cross, the largest insurer, to grant Partners higher payment rates in the state, with the understanding that Partners would in turn seek higher prices from other insurers. It was a gentlemen’s agreement sealed with a handshake that gave Partners’ doctors and hospitals, including Massachusetts General, the big kahuna of the state’s hospitals, large insurance payment increases. In return, Partners agreed to protect Blue Cross from competition from other insurers that might otherwise pay less. It agreed to push for higher payment increases from Blue Cross’s competitors, thus assuring that “all major insurers would face tens of millions in cost increases,” as the Boston Globe put it. Blue Cross called it a “market covenant.”

Market consolidation continued, and in 2014 Partners tried to make a deal with the state attorney general to acquire three community hospitals in Eastern Massachusetts in exchange for limiting price increases to the rate of general inflation and prohibitions on acquiring more hospitals for seven years. The proposed acquisition had run into fierce opposition, and eventually a court decision prevented the Partner’s acquisition. However, Partners bought a large physician group connected with one of the hospitals it originally planned to buy. Since then Partners has purchased Massachusetts Eye and Ear, a Boston specialty hospital, and two hospitals in New Hampshire.

A new strategy for Partners, since renamed Mass General Brigham, is emerging with the news that Mass General Brigham is planning to build several ambulatory care centers in the Boston suburbs. The wealthy Boston Children’s Hospital is planning to do the same. Their goals seem to be grabbing a larger share of “the lucrative commercial insurance patient market and to create opportunities for referrals for additional inpatient and outpatient care at their expensive flagship hospitals,” Hattis wrote in Boston’s CommonWealth Magazine. When that happens, Hattis told me, there’s a potential to “weaken other providers in the area, especially those who care for a lot of Medicare and Medicaid patients” and “to steal market share and get immediate price increases.” It’s fair to ask what we as a country are getting as a result of all this consolidation and expansion. “If hospitals perform the same service, they have to compete with quality or price. If they’re the only game in town, they don’t necessarily have to focus on either,” said Nisarg Patel, a resident surgeon at UCSF Medical Center and cofounder of Memora Health, a software company, who also writes about health care prices.

The latest international health comparison survey by The Commonwealth Fund* released in August shows the U.S. is not producing the kind of stellar health outcomes one might expect from the incredible sums spent on care. The Fund reported that America ranked dead last overall in its comparison of the health systems of 11 high-income countries. In fact, the U.S. has ranked last in all seven surveys the Fund has conducted since 2004. “We stand out as a major outlier here,” said Reginald Williams, a vice president at the Fund.

If those kinds of dismal rankings are abstract to many Americans, the numbers from the actuarial firm Milliman are real and concrete. From 2011 to 2021, Milliman estimates that employees’ out-of-pocket spending on medical expenses rose 41%, “probably higher than wage gains” over that period, says Doug Norris, a Milliman principal and consulting actuary. At the same time, he said, the average employee contribution to health insurance premiums has increased 61%.

“We have a growing proportion of Americans who have inadequate protection against the cost of medical care,” said Jonathan Oberlander, professor of health policy and management at the University of North Carolina-Chapel Hill. Nine years ago, Oberlander wrote in the New England Journal of Medicine, “Americans have been singularly unsuccessful in restraining health care spending. The United States has moved through fads at a dizzying pace in recent decades — from managed, to consumer-driven to accountable care— but they have thus far failed to produce reliable cost control,” Oberlander wrote. When we spoke, he told me, “We’re still trapped in the idea there’s a magic bullet. One thing we know works is price regulation. The ACA didn’t have it for political reasons.”

There’s a flicker of recognition that run-away hospital prices may no longer be acceptable and that maybe, just maybe, there needs to be some price controls. This summer in Massachusetts, Stuart Altman, the chair of the state’s Health Policy Commission, declared at a commission meeting that the commission is “now facing the greatest increase in pressure on health care costs” in the eight years the commission has been in business.

The 161,000 member American College of Physicians has just published a position paper that is deeply critical of the American health care system. “What many imagine to be a lean, market-based system is actually bloated, complex, and fragmented, increasingly directed toward generating profit,” the paper states. In its place, the group calls for “comprehensive health coverage like a public choice model or single payer model” and recommends that nonprofit hospitals “be required to provide measurable benefits to the community.” That’s huge considering that historically it has been the doctors who have fought so vigorously against national health insurance. Before the pandemic began, I wrote about the American College’s embrace of a single-payer or public option solution.

Increasingly, journalists like me who may have covered America’s health dilemma for a very long time are starting to revisit the debate over high medical costs and what to do about them including cost controls, the remedy used by other peer countries against soaring prices and the one solution that the special health care interests are fighting so hard to prevent. In May 2020 the New York Times published a bold story about how 20 of the nation’s wealthiest hospitals got more than $5 billion in federal grants while sitting on $100 billion in cash. Just last week WFAE, the NPR station in Charlotte aired a fine segment by Dana Miller Ervin dissecting the high costs in her area, driven in part by three dominant hospitals.

While hospitals sometimes seek to deflect blame to other sectors of health care, there’s no question they play an outsized role in rising costs.

“In the last 20 years hospital prices have increased, producing unconscionably high levels of cash and investments maintained by nonprofit hospitals in the many billions of dollars,” Dr. Robert Berenson, an Institute Fellow at the Urban Institute, told me. “The prices are the leading cause of high and rising health care costs.” Berenson noted that while drug prices are the “most egregious, prescription drugs represent only 11% of health care costs, whereas hospitals are about 35%.” When you add in spending on physicians and other health professionals who are increasingly owned by or employed by hospitals, “the percentage of spending for hospitals and health professionals exceeds 60%,” he said. “It is the main cost problem and not addressed at all by the federal government.”

On the last day of August, John Arnold, who heads the philanthropy Arnold Ventures, sent out a tweet that summed up America’s hospital consolidation crisis. “Sutter Health is one of the largest hospital systems in California. Today Sutter agreed to $90 million fine for Medicare fraud. Yesterday Sutter finalized a $575 million fine for using its market power to illegally drive up prices. Sutter is a nonprofit with a mission to serve the community.”

Who in Congress is paying attention?

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Veteran health care journalist Trudy Lieberman is a contributing editor at the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care column.

Trudy Lieberman | Columnist

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