Policy-Driven Hospital Consolidation Fuels Price Inflation, Report Warns

A policy-focused paper argues U.S. hospitals have become expensive largely because government policies reward consolidation and shield providers from competition—via CON laws, physician-owned hospital barriers, subsidies, and complex payment schemes—leading to prices rising faster than inflation even as outpatient care grows. Hospitals remain profitable, supported by Medicare/Medicaid and investment income, while price transparency is limited and costs are driven up by subsidies and consolidation. The report calls for site-neutral Medicare/Medicaid payments, tighter subsidy oversight, repeal of anticompetitive rules, targeted charity-care standards, and reform of hospital subsidies to reward efficiency and true need, aiming to restore competition and reduce costs for patients and taxpayers.