Every year, American families brace themselves for the disappointing news: rising healthcare costs. This grim trend is accepted as a norm, but it shouldn’t have to be. Much of the financial strain arises from hospitals and large health systems engaging in troubling practices, such as opaque pricing, inflated bills, and consolidation that stifles competition.
The issue of fraudulent billing is particularly alarming. Hospitals often bill for care not provided, manipulating coding to inflate costs. A recent analysis of claims from Blue Cross Blue Shield reveals that a small number of hospitals drive this disturbing trend. By early 2025, these high-growth facilities were misclassifying a staggering 60 percent of inpatient admissions as “complex.” Not only does this inflate costs, but it also adds significant financial burdens, with estimates of excess maternity spending alone totaling $22 million over a short period. These inflated costs do not vanish; they get passed along to patients through higher premiums.
Further complicating matters are facility fees that vary wildly based on where services are rendered. For example, getting the same routine test in a doctor’s office can cost significantly less than in a hospital outpatient setting. Research indicates that an echocardiogram costs three times more at a hospital. The care remains the same, but the pricing does not reflect reality. This situation effectively captures families in a cycle of escalating expenses, as the leverage hospitals hold drives up costs without improving care quality.
Phantom charges also add to the burden, with hospitals billing for services that were never actually rendered. The National Health Care Anti-Fraud Association estimates that this kind of fraud can account for between 3 to 10 percent of total health spending—a staggering figure that suggests far more accountability is needed. A prominent case is that of UCHealth in Colorado, which settled for $23 million due to allegations of unscrupulous billing practices related to emergency department visits.
Another strategy used by hospitals is unbundling procedures, breaking down a single procedure into multiple charges that add up to far more than anything a patient would agree to if they were aware of all costs upfront. This practice highlights the need for improved transparency in healthcare pricing.
Many patients find themselves unable to shop around for better prices. Over the past two decades, about 1,300 hospital mergers have resulted in fewer independent competitors. The consolidation has resulted in price setting by dominant systems, severely limiting the leverage of insurers and, by extension, the consumers they serve. In regions dominated by a single hospital system, competition falters. When the market lacks proper checks, bad practices thrive.
Despite regulations requiring hospitals to post prices, compliance remains lackluster; many hospitals present data in a way that is not user-friendly for patients. The spirit of transparency is overshadowed by the tactic of hiding information.
Conservative principles have long emphasized the importance of accountability and market transparency. Real competition requires that buyers have access to meaningful information and choices. The healthcare sector needs to embrace the same standards of accountability, targeting fraud, waste, and abuse aggressively.
The solutions to these systemic problems are straightforward. There is a need to enforce real penalties for noncompliance with price transparency laws. Anticompetitive mergers should be challenged, ensuring independent competitors remain. Regular audits focused on upcoding practices must become standard, with the findings made accessible to the public. Facility fees should be clearly disclosed to patients before they arrive for care.
The essence of accountability is simple: if services cannot be clearly justified, they should not be paid for. This principle is applicable across industries and must extend to healthcare. Working families have faced inflated hospital costs long enough; it is time for the federal government to address these issues head-on.
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