Left And Right Agree—Hospital Consolidation Is Driving Up Healthcare Costs

BusinessPolicyLeft And Right Agree—Hospital Consolidation Is Driving Up Healthcare CostsBySally Pipes,Contributor.Forbes contributors publish independent expert analyses and insights. Sally Pipes is a scholar and think tank CEO who writes on health care.Follow AuthorMay 18, 2026, 08:00am EDT“Large hospital systems have gained enormous market power in recent years,” says health expert Sally Pipes. “That market power has enabled them to command higher prices—and sustain healthy balance sheets.”Getty ImagesA growing bipartisan consensus is emerging around one of the biggest drivers of America’s healthcare affordability crisis: hospital consolidation.Two reports published this spring—one from the market-oriented Paragon Health Institute and another from the progressive advocacy group Families USA—arrive at remarkably similar conclusions. Large hospital systems have gained enormous market power in recent years. That market power has enabled them to command higher prices—and sustain healthy balance sheets.That agreement matters because healthcare debates in Washington rarely produce much ideological overlap. But when organizations on opposite sides of the political spectrum identify the same problem, policymakers should pay attention.Hospitals now account for roughly 31% of all healthcare spending in the United States, compared to about 21% for physician services and 9% for retail prescription drugs. According to the Kaiser Family Foundation, hospitals drove roughly 40% of healthcare spending growth between 2022 and 2024.The Paragon and Families USA reports add important context to those figures.According to Paragon, hospital prices have risen twice as fast as wages since 2000 and roughly three times faster than inflation.MORE FOR YOUFamilies USA found that the nation’s 15 largest hospital systems charged commercial insurers nearly three times what Medicare paid for the same services between 2018 and 2023.Some systems charged substantially more. HCA Healthcare charged 339...