Congressional Committees Examine Rising Healthcare Costs in Separate Hearings with Hospital and Insurance Executives

U.S. House Examines Rising Healthcare Costs in Dual Hearings

The U.S. House of Representatives conducted a series of hearings this week focused on the rising cost of healthcare, questioning executives from both hospital systems and health insurance companies about their pricing practices.

Part 1: House Hearing on Hospital Pricing

On Tuesday, the House Ways and Means Committee held a hearing on hospital pricing. Witnesses included CEOs from HCA Healthcare, CommonSpirit Health, New York-Presbyterian, and ECU Health.

"The American people are fed up with outrageous prices that seem artificially high." — Rep. Jason Smith (R-MO)

Republican committee members criticized hospitals for charging higher prices than independent medical practices. Specific criticisms included the use of facility fees for outpatient services.

• Rep. Jason Smith (R-MO) stated that “The American people are fed up with outrageous prices that seem artificially high.”
• Rep. David Kustoff (R-TN) cited a $1,222 facility fee for a colonoscopy at a hospital outpatient facility compared to $656 at an independent surgical center.
• Rep. Greg Steube (R-FL) questioned how facility fees on outpatient facilities are justified when there is no meaningful difference in the care delivered or its quality.

Hospital executives defended their pricing structures. Michael Waldrum (ECU Health) stated that hospitals are the only participants in the healthcare value chain with an obligation to treat all patients regardless of their ability to pay. The executives argued that higher fees reflect higher care quality, the cost of treating sicker patients, and uncompensated care.

Democratic members of the committee offered a differing perspective.

• Rep. Lloyd Doggett (D-TX) called the hearing a “deflection” from Republican policies, including Medicaid cuts.
• Rep. Richard Neal (D-MA) said Republicans are trying to focus on providers while ignoring their own policies.

Part 2: Upcoming Hearing on Health Insurance Costs

CEOs from five major health insurance companies—UnitedHealth Group, CVS Health Group, Cigna Health Group, Elevance Health, and Ascendiun—are scheduled to testify before the Energy and Commerce and Ways and Means committees on Thursday.

"Insurance companies are an easy target because they make people miserable through prior authorization review and in many other ways." — Drew Altman, KFF

The hearings follow the expiration of enhanced Affordable Care Act (ACA) subsidies late last year, which resulted in premium increases. Congress currently has no immediate plans to address the expired tax credits. The House and Senate have not reached an agreement on reducing health insurance premiums. Experts suggest the likelihood of passing related legislation soon is low due to upcoming congressional recesses.

President Donald Trump and Republicans are receiving criticism from voters regarding the cost of living, including healthcare expenses. Last week, Trump introduced a healthcare plan that proposed redirecting ACA subsidy funding into health savings accounts. The plan provided limited details and was criticized for reiterating previously discussed concepts. Many of its proposals require congressional approval. Trump’s plan is not anticipated to be the primary focus of Thursday’s hearings.

Committee Chairs Brett Guthrie (R-Ky.) and Jason Smith (R-Mo.) stated that the hearings are expected to be the first in a series examining the “root causes” of increasing healthcare prices. The hearings will also address the ACA, which Republicans identify as a significant factor in higher healthcare costs. According to a hearing document:

"The ACA mandated coverage for individuals regardless of underlying health conditions and largely prohibited plans from underwriting plans at the individual level, effectively increasing health care access and affordability for the unhealthiest Americans but also driving up health care costs for healthier Americans."

Gideon Lukens, a senior fellow at the Center on Budget and Policy Priorities, stated that the ACA resolved issues concerning coverage for individuals with pre-existing conditions and stabilized the overall insurance market. Lukens noted that prior to the ACA, insurers in individual and small-group markets could deny coverage or charge significantly more to people with pre-existing conditions, leading to wide premium fluctuations and limited options. Lukens highlighted the expired enhanced ACA tax credit as a key issue. He asserted that a hearing on health care affordability should concentrate on the current affordability crisis resulting from the expiration of these enhancements.

Drew Altman, president and CEO of KFF, a nonpartisan health policy research group, stated, "Insurance companies are an easy target because they make people miserable through prior authorization review and in many other ways."

Insurers have consistently maintained that premium increases primarily stem from rising costs within the broader healthcare system, specifically hospital and prescription drug expenses. This year, premiums increased across ACA plans, job-based insurance, and Medicare.

• Stephen Hemsley, CEO of UnitedHealth Group, stated in written testimony that insurers "compete aggressively" to offer affordable premiums, but that costs are largely dictated by the broader health care system. Hemsley's testimony indicated that rising premiums are "a symptom, not a cause," explaining that "Premium rates are based on two key factors: how much care is used and how much is charged for that care. When the price of care goes up and care activity increases, the cost of health coverage necessarily follows."
• David Joyner, CEO of CVS Health, stated that his company assists families "struggling with an often confusing, disconnected system and the rising cost of health care." Joyner wrote that the factors driving these costs are understood as "greater demand for care, growing medical provider costs, and persistently high prices for hospital care and prescription drugs."