In 2022, hospital care represented the largest share of personal health care expenditures in the United States, reaching $1.4 trillion. It also accounts for the largest portion of the National Health Expenditure at 30 percent. An essential part to living a long and healthy life is by obtaining high quality health care. With most Americans living paycheck to paycheck, a hospital stay can be financially devastating. Between 1999 and 2021, the average hospital stay cost increased 161.7%.

Hospitals obtain revenues from several sources

In Michigan, hospital costs are climbing at an unsustainable rate. Between 2010 and 2020, payers in Michigan experienced a 40 percent increase in costs for hospital services.

When comparing data between the RAND hospital price studies, the 2.0 and 4.0 versions, we see that employers and private plans paid major hospitals in Michigan between 172 percent and 307 percent of what Medicare paid for the same services in the same hospital. In addition, employer-sponsored and private plans saw in increase in charges between the two studies.

Policy makers, employers and consumers need to ask why hospitals are charging private and employer-sponsored plans way above the Medicare rate for the same services.