Soaring Healthcare Prices, Not Patient Volume, Are Squeezing American Businesses

Bob covers health care financing, with a focus on insurance markets and hospital systems. His reporting explores Medicare Advantage, obscured prescription drug benefits, and executive compensation. He is the author of the Health Care Inc. newsletter and can be reached on Signal at bobjherman.09.

Employees and employers alike are struggling under the weight of escalating health insurance premiums, a surge driven primarily by exorbitant and often opaque pricing within the health care industry.

Insurers do not calculate premiums in isolation; the care patients receive is the dominant variable. STAT’s investigation reveals that the principal driver of these costs is not utilization frequency—how often people visit hospitals or clinics—but rather the runaway rates charged across the health care sector, leaving workers and businesses largely unable to intervene.

For Gerard Anderson, the nation’s inflated pricing is as ubiquitous and overlooked as the air we breathe. A veteran health care spending and policy analyst with four decades of experience, Anderson helped architect Medicare’s hospital payment structure in the 1980s. He co-authored landmark papers in 2003 and 2019 that pinpointed the root of America’s anomalous health spending: “It’s the prices, stupid.”

“Some things don’t change,” said Anderson, a Johns Hopkins professor, speaking to STAT.

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