Providers and Patients Alike Grapple with Spiking Prices

By Jonathan Springston, Editor, Relias Media

Hospital price growth averaged 2% annually from 2010 until the start of the COVID-19 pandemic in 2020. Concurrently, insurance premiums have risen an average of 4.4% over the same period. As a rapidly aging American population seeks more complicated healthcare services more often, providers are struggling to offer services at a reasonable price as they face exploding costs on several fronts.

Aside from labor costs and the seemingly never-ending rise in drug costs, healthcare providers are investing in complicated medical technology and intricate therapies to meet patients’ needs. Additionally, there are the costs associated with administrative requirements, both short-term (e.g., navigating varied insurance requirements) and long-term (e.g., multibillion-dollar investments in IT infrastructure upgrades).

In September, a consulting firm estimated U.S. hospitals could finish 2021 with a net income loss of $54 billion, which can be attributed to sicker patients, higher expenses, and fewer outpatient visits. It is not just the never-ending COVID-19 pandemic causing capacity problems; today, many patients are presenting with conditions that require extra treatment and longer stays — primarily because these patients put off routine care during the pandemic, which only exacerbated untreated and undiagnosed underlying health problems.

The COVID-19 pandemic wiped out years of steady progress on healthcare-associated infections, attributed in part to thinly staffed infection prevention departments. Along the way, other problems took a backseat, like battling multidrug-resistant organisms, which can cost the healthcare system upward of $5 billion annually to treat.