Hospital prices continue to drive healthcare costs across the country

A recent KFF Health News story out of Asheville, North Carolina, offers a striking example of one of the biggest forces behind rising healthcare costs.

After tearing her meniscus, a patient received a hospital estimate of more than $9,000 for surgery. By choosing an outpatient facility that was not affiliated with the hospital, she ultimately paid less than a third of that amount for the same procedure.

The difference was not the quality of care. It was where the care was delivered.

The story highlights a trend that is affecting employers, workers, and families nationwide. Hospital care accounts for roughly one-third of all healthcare spending, and according to KFF, hospitals were responsible for approximately 40% of the growth in national health spending between 2022 and 2024.

One factor contributing to higher costs is healthcare consolidation. As more independent physician practices become part of hospital-owned systems, the cost of providing the same services often increases, even when the care itself remains unchanged. Services that were once delivered in lower-cost settings may carry significantly higher price tags simply because they are performed within a hospital-owned network.

For employers, the impact is felt during every renewal cycle. Family coverage through employer-sponsored health plans is projected to exceed $35,000 this year, placing continued pressure on benefit budgets. As hospital prices rise, those costs ripple throughout the healthcare system, affecting employers and employees alike.

The Asheville case is just one example of a broader pattern healthcare analysts are monitoring across the country. Understanding the factors that drive prices, including site-of-care differences and market consolidation, is an important step toward improving affordability.

This is why Premera is determined to shine a light on rising healthcare costs by taking a closer look at the drivers behind spending growth and focusing on solutions that reduce costs without compromising quality or outcomes.