Voters may not have ranked health care as a top concern in last month’s elections, but the ever-increasing cost of care means policymakers are going to have to address the issue sooner than later. 

Next year, employer health premiums are expected to jump nine percent, meaning insurance premiums could cost the average American family more than $26,000 in 2025. 

Given the rising cost of living and still-too-high inflation rates, Americans can ill-afford to pay even more for health care. Sadly, that’s the reality facing millions of families nationwide. It’s a problem we hear about almost every year, and it’s happening thanks in no small part to consolidation within the health care sector.

In a growing trend that is particularly harmful for rural and underserved communities, misguided government policies are incentivizing large corporate hospitals and health systems to purchase independent physician practices and absorb their facilities into their campuses. While the acquisition of private physician practices by larger hospitals and health systems has been happening for years, the economic impact of the Covid pandemic on smaller physician practices has exacerbated this issue. As of early 2024, giant hospitals and corporate entities owned nearly 78 percent of physician practices.

Once purchased and absorbed into a hospital system, a private doctor’s office gets a brand-new classification—as a “hospital outpatient department.” Hospitals can then begin charging patients higher rates despite the care itself remaining unchanged. 

According to a study by the Journal of Health Economics, prices for services provided by physician practices increase by an average of 14 percent once they have been acquired by and absorbed into a corporate hospital system—and costs can even go much higher. A routine chest x-ray, for example, cost more than three times as much in an HOPD than in a doctor’s office as of 2022.

The worst part is that, from the patient’s point of view, nothing about their local doctor’s office has changed. Sometimes, patients aren’t even aware that there has been a change in ownership. Why would they? They’re getting similar care, but hospitals can now increase their rates and slap on hidden fees that increase costs for Medicare and patients alike.

To address this issue, lawmakers must work to pass site-neutral payment reform that would prevent hospitals from taking advantage of the loophole that allows them to charge higher prices for the same care. A study by the Committee for Responsible Federal Budget found that such policies could help lower Medicare spending by more than $150 billion and reduce costs for beneficiaries by as much as $95 billion over a decade.

Currently, two pieces of legislation — the Site-based Invoicing and Transparency Enhancement (SITE) Act in the Senate and the Facilitating Accountability in Reimbursements (FAIR) Act in the House — would help achieve these goals. Both are commonsense, bipartisan bills that would ensure fairer, more transparent hospital billing practices that lower costs for consumers and taxpayers, while removing a major incentive that is driving the health care consolidation, undermining access, and driving up costs.

The next Congress should work to enact the SITE and FAIR Acts to help improve patient access and reduce spiraling health care costs. Hopefully, Pennsylvania’s delegation on Capitol Hill can help make that happen.

Emily Greene is the Pennsylvania State Director of Americans for Prosperity.