Hospital prices are the main driver of U.S. healthcare spending inflation, and that trend should direct any policy changes going forward, according to a new study. 

For inpatient care, hospital prices grew 42% from 2007 to 2014 while physician prices rose 18%, according to researchers who studied the Health Care Cost Institute’s claims data for people with employer-sponsored insurance from Aetna, Humana and UnitedHealthcare Group. Similarly, for hospital-based outpatient care, hospital prices increased 25% while physician prices grew 6%, the new Health Affairs study found. 


In 2010, CMS established the Hospital Readmissions Reduction Program under the ACA. Two years later, the government began fining hospitals with high rates of readmission within 30 days of a hospitalization for pneumonia, heart attack, or heart failure. But a study finds the program may have led to more patient deaths. “Why are policies that profoundly influence patient care not rigorously studied before widespread rollout?” the researchers ask. “[W]e remain uncertain about whether it has had unintentionally deadly consequences. That should be a bracing reminder that before we are seduced by promising but untried ideas, we need to first demand robust evidence that they will not harm patients.” 

For decades, we’ve talked and talked and talked about the high cost of American health care. But we haven’t done anything about it. As the above chart shows, the problem has gotten so bad that, today, hospital spending reduces the average family’s take-home pay more than do federal taxes.

Overall, as a country, Americans spent $1.2 trillion on hospital care in 2018. That’s over $3,600 for every man, woman, and child in the U.S. The Centers for Medicare and Medicaid Services project that, by 2026, hospital spending will rise to $1.8 trillion: over $5,300 per person.

In the wake of Republicans failing to repeal and replace Obamacare and the Democratic takeover of the House, where will the health care debate go from here?

No important health care legislation will come out of this gridlocked Congress. But the run-up to the 2020 presidential campaign will produce at least a Democratic health care plan out of the nominating process.

People 65 and older accounted for over one third of U.S. medical spending. Yet despite the fact that government pays for 65% of the elderly’s medical expenses, the burden of health spending (out-of-pocket expenses as a percentage of income) is much higher among the elderly than among those below age 65. You might suppose that a policymaker in 2008 would look at these data and conclude that if there is a crisis in affordability within the U.S. population, it lies among the elderly. 

Gallup polls have been asking some big picture questions about the major dimensions of health system performance–quality, coverage, costs and access–for nearly two decades now. This allows me to show you a long time series of trends that leave little doubt that despite many lofty promises made for Obamacare (or the high hopes of its proponents), Obamacare essentially left American health the same or worse on quality, coverage, costs and access . I found literally no evidence in these data that it made things better.

The Democratic party is moving steadily toward a full embrace of Medicare for All as its official health-care policy. While the term is flexible enough to mean different things to different people, the overall direction is clear enough. The party is advocating for the enrollment — eventually — of all Americans in a government-run insurance plan of some sort.

Last month, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas issued a ruling declaring Obamacare unconstitutional. The case was brought by 20 Republican state attorneys general. Seventeen Democratic state attorneys general responded January 3 by appealing to the U.S. Court of Appeals for the 5th Circuit.

Judge O’Connor appears to be on a bit of an island — the conventional wisdom on both the right and left is that his decision will be overturned by a higher court.

The number of uninsured Americans is rising. Last year, 27.4 million Americans went without health insurance, an increase of 700,000 from 2016, according to a just-published analysis from the Kaiser Family Foundation. Government mandates deserve much of the blame. Regulations and red tape have driven premiums through the roof, pricing many Americans out of the insurance market. Nearly half of uninsured people cite high premiums and prohibitive deductibles as the reasons they aren’t covered. Free-market reforms would enable millions more people to afford insurance that fits their needs and those of their family.

Numbers released this week by the government show just a slight dip in the number of people enrolled in Affordable Care Act coverage next year through HealthCare.gov. That’s the case even though the Republican-led Congress repealed fines for being uninsured effective Jan. 1. The drop — from 8.8 million to 8.5 million — was far less than experts forecast.