💡 The Current Situation
Patients don’t access healthcare in insurance headquarters or pharmaceutical boardrooms. They experience it in hospitals, emergency rooms and clinics. All roads – from reimbursement cuts, rising drug costs and insurer-driven reforms to supply and salary inflation – lead to increased operating costs for hospitals and ultimately, raise the price for patients. Yet patients still expect that when they need care, a hospital will be there, and that they’ll be able to afford the bill afterward.
When policymakers discuss healthcare affordability, transparency or reform solutions, they must also discuss strengthening the financial viability of the institutions responsible for delivering it.
“Hospitals are largely price takers, not price setters; government programs set rates administratively, and insurers negotiate payment terms. In 2025, expenses grew about twice as fast as hospital reimbursements for patient care, meaning hospitals absorbed much of the increase instead of shifting it to patients or payers.”
– Richard Pollack, president and chief executive of the American Hospital Association
“A more constructive path forward starts with acknowledging the full set of pressures across the system, not selectively placing blame on the providers working to keep patients healthy.“
– Lynn Falcone, chief executive of Cuero Regional Hospital (TX)
The New York Times: Why Does Health Care Cost So Much? (AHA Responses)
📈 A Complete Cost Report
A patient’s final bill is shaped by far more than a hospital charge. Insurance design, deductibles, copays, pharmaceutical pricing, reimbursement policies and negotiated insurer rates all determine what patients ultimately pay.
Hospitals support price transparency. Patients are justified in wanting clearer prices before receiving care that is planned in advance. Transparent pricing only works when the entire system participates:
- Hospitals disclose prices clearly.
- Insurers must explain patient cost-sharing accurately.
Without addressing these broader forces, transparency risks becoming a partial solution to a much larger affordability problem.
“Three out of ten adults (30%) said that it was somewhat or very difficult to understand how much they would have to pay out-of-pocket when they use their health insurance. One-quarter (25%) of insured adults said that it was somewhat or very difficult to understand specific terms that their health insurance uses such as “deductible,” “copay,” “coinsurance, “prior authorization,” or “allowed amount.””
KFF: Navigating the Maze: A Look at Patient Cost-Sharing Complexities and Consumer Protections
“Affordability stands as a primary hurdle, with one in six adults in Texas (60%) and nationally (61%) identifying it as a top barrier to healthcare access. U.S. adults also rate the system’s outsized focus on profit, insurance coverage availability, and ability to understand coverage options as other factors that contribute to accessibility challenges.”
AAPA: The Patient Experience Perspectives on Today’s Healthcare (Texas 2023 Report)
⚕️ Keeping Accessible Care Close to Home
Keeping care available 24/7 – in hospitals, outpatient clinics and emergency departments – requires continuous investment in staffing, equipment, technology and compliance. Outpatient clinics and hospital-based services provide Texans with accessible care close to home. Facility fees fund that infrastructure while professional fees compensate the clinicians for delivering care. Both are essential, yet insurers increasingly offload these costs onto patients through higher deductibles, copays and narrower coverage.
The result: financially strained hospitals, especially rural and safety-net facilities, are forced to cut services, close departments or consolidate to survive – not as a market strategy, but as a last resort to keep care in their communities.
While consolidation is often criticized solely as market expansion, it can also function as a survival strategy that preserves access to care, pools resources and prevents communities from losing hospitals altogether.
Facility fees are the hospital payment. Consolidation keeps services available. They are both necessary for the viability of hospitals and their services.
“Insurers argue hospitals’ acquisitions of doctors’ offices led them to charge higher rates for care previously billed at lower physician-office prices. Hospitals said the higher cost reflects the complexity of maintaining 24/7 operations, meeting stricter regulatory requirements, and treating sicker patients.”
Politico: Hospitals are taking the fall for high health care costs
⭐ To patients, hospitals are not just one part of an expensive system – in many communities, they are the center of the system. Hospitals alone cannot solve affordability challenges.
Sustainable patient care is impossible without financially stable hospitals. No margin, no mission.
📖 Learn More
Price Transparency: A Primer On State, Federal Requirements
Texas: Don’t Dismantle Outpatient Hospital Care
Facility Fees Keep the Lights On, Not Line Pockets
