Hospital executives took the hot seat Tuesday before a House committee determined to pin blame for soaring healthcare costs on their doorstep, but they left unchanged in their conviction that higher prices and facility charges are unavoidable.
Four major health system CEOs testified before the House Ways and Means Committee, facing pointed criticism from Republicans over what they called exploitation through inflated facility fees. The executives represented HCA Healthcare, CommonSpirit Health, New York-Presbyterian and ECU Health.
The hearing centered on a stark reality: patients routinely pay double or triple for identical services depending on whether they walk into a hospital-affiliated clinic versus an independent practice. Rep. David Kustoff of Tennessee offered a concrete example. An independent surgical center in his district charged a $656 facility fee for a colonoscopy. A hospital outpatient facility performing the same procedure charged $1,222, a 100 percent markup that served no purpose except to fund hospital overhead.
Rep. Greg Steube of Florida painted a similar picture from his state, where hospital-owned outpatient clinics consistently outcharge physician-owned competitors despite delivering identical care. "How can you justify facility fees on outpatient facilities when there is no meaningful difference in the care delivered or the quality of the care?" Steube demanded.
Committee Chair Jason Smith, a Missouri Republican, set the tone early. "The American people are fed up with outrageous prices that seem artificially high," he said.
Hospitals now command roughly one-third of all U.S. healthcare spending, or about $1.6 trillion annually. Research published in JAMA Health Forum demonstrated that patients consistently shoulder higher bills when their doctor operates within a hospital system or under private equity ownership, compared to truly independent practitioners.
The hospital leaders did not retreat. Instead, they reframed their pricing as a reflection of obligation and subsidy. Hospitals alone, they argued, face a federal mandate to treat all patients regardless of ability to pay. Private clinics, by contrast, can cherry-pick their customers and demand upfront payment.
"We're the only participants in the healthcare value chain that have that obligation," said Michael Waldrum, CEO of ECU Health in North Carolina. "Doctors, nurses, insurance companies, drug companies do not."
The executives also pointed to reimbursement shortfalls from government programs like Medicare and Medicaid, claiming they routinely lose money on those patients and offset losses through higher charges elsewhere. They further argued their prices reflect superior quality and the complexity of treating sicker patient populations.
Democrats largely sat out the confrontation. Instead, they accused Republicans of theater designed to distract from Medicaid cuts that the GOP pushed through as part of President Trump's domestic policy package last year. Rep. Lloyd Doggett of Texas called it "more a deflection hearing than a hospital hearing." Ranking Democrat Richard Neal of Massachusetts suggested Republicans were misdirecting blame away from their own policy choices.
Author Sarah Mitchell: "The hospital argument about federal mandates has merit, but it doesn't explain why they charge three times as much at their outpatient facilities as independent centers do, nor does it excuse burying those costs in murky facility fees."
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