💡 What’s Happening?
A viral graphic dubbed the “Chart of the Century,” based on consumer price index (CPI) data from the U.S. Bureau of Labor Statistics, is fueling conversations around affordability, and shows hospital services as the fastest-rising in a list of consumer costs between January 2000 and December 2025.
So, what’s causing the steep upward trajectory of hospital costs? And perhaps more importantly, does this depiction of eye-popping hospital price growth pass a stress test?
TLDR: No.
📈 The Rising Cost of Insurer Profits
Medical inflation is 1.5 times that of the general inflation rate this century. The chart is a better depiction of 25 years of upward pressure on hospital costs from the fast-paced inflation of labor, drugs, supplies and operations: wages must be high enough to pay skilled health care workers’ soaring cost of living driven by housing, childcare and student debt expense. Costs are further compounded by increases in drug pricing and manufacturing, sophisticated medical devices, costlier utilities and building expenses. But patients don’t buy hospital care directly – they buy health insurance.
The chart’s data is based on a government approach that ties estimated medical care prices to health insurance premiums and patient spending. In doing so, it largely assumes that when premiums rise, so does the cost of hospital care, which misses a major factor: It does not fully account for how much insurers retain from each premium dollar or how much cost is shifted to patients through deductibles and coinsurance. Between 2014 and 2024, the nation’s seven largest health insurers did not miss the fact that they tripled their revenues and had outperforming stock prices, while patients faced higher out-of-pocket costs.
Thankfully, there’s a better measure of true hospital price growth. When measuring hospital price growth using the Producer Price Index (PPI) – which tracks “changes in payer reimbursements for health care services” and directly reflects the price being paid –the increase is much more modest than what the chart suggests.
🏛️ Red Tape Burdens
The Chart of the Century – as well as improved versions of the chart that don’t rely on cherry-picking industries – does reveal a noteworthy pattern: Hospitals operate within a complex world of regulations, insurance design, government payment shortfalls and administrative burdens, all of which add to the growing costs hospitals must cover. It’s hard to stay out of the red when many hospital services offered around the clock require constant, costly and necessary investment to comply with more rules than any other industry.
Yet Texas hospitals also provide billions of dollars in uncompensated and underfunded care each year while maintaining emergency departments, specialty services and access points that communities depend on. Hospitals will always take care of patients regardless of ability to pay and promote the health and well-being of all Texans – unlike televisions, smartphones or other mass-produced products, that kind of care cannot be outsourced, automated or placed on a shelf.
“Payers erect roadblocks and hurdles allegedly designed to save money for the health system and protect precious resources, but when patients and their doctors face care delays—or even give up and abandon necessary care—the result can actually be increased overall costs when worsening health conditions force patients to seek urgent or emergency treatment.“
– AMA President Bruce A. Scott, MD
American Medical Association:
Prior authorization delays care—and increases health care costs
⭐ These financial pressures aren’t just abstract “price inflation.”
They are a reflection of the growing cost of sustaining access to care in an overwhelmingly complicated healthcare system. Rising costs affect patients, hospitals, employers and taxpayers alike. But the “Chart of the Century” risks obscuring the role of insurance design, patient cost-sharing and broader healthcare system pressures by attributing nearly all of the increase to hospitals.
📖 Learn More
THA Testifies: Tune in on June 4, from 9 a.m. to 4 p.m. for the House Insurance Committee Meeting, where THA CEO and President John Hawkins will be testifying, and for the Public Health Committee Hearing, where THA members will be testifying.
Insurance Companies Shift Health Care Costs to Patients
What’s Driving the Cost of Hospital Care?
Agencies of Regulatory Significance
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