December 4, 2025 • 16 mins
HOW HOSPITALS ARE DRIVING UP HEALTHCARE COSTS The thing that makes health insurance so expensive is the COST of the healthcare being delivered, and as we try to fix health insurance we can't do so without acknowledging what is driving those costs. One bit thing is hospital consolidation. Hospitals are buying up private practices, surgical centers and more and then leveraging their monopoly powers to charge more to insurance companies, who then charge more to insurers. I've got Peter Pitts, former Associate FDA Commissioner and President of the Center for Medicine in the Public Interest on at 1pm to talk about it. He recently testified before Congress and in part had this to say:
“Healthcare in the United States is in a crisis of affordability and accountability. In 2023, Americans spent more than $1.5 trillion at hospitals—nearly one-third of total health expenditures. Hospital systems, especially nonprofit institutions, are the primary driver of healthcare cost inflation and systemic inefficiency.”
If we want to lower healthcare costs, we have to fix this broken system. Peter also has a book out about the process of creative destruction and how to leverage it and you can buy it here.
“Healthcare in the United States is in a crisis of affordability and accountability. In 2023, Americans spent more than $1.5 trillion at hospitals—nearly one-third of total health expenditures. Hospital systems, especially nonprofit institutions, are the primary driver of healthcare cost inflation and systemic inefficiency.”
If we want to lower healthcare costs, we have to fix this broken system. Peter also has a book out about the process of creative destruction and how to leverage it and you can buy it here.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
We're talking about things that are ridiculously expensive. And my
next guest is on to talk about, well, what is
making healthcare so expensive? Health insurance is directly reflected in
how much health care costs. So what are driving the
costs of health care? And joining me now former Associate
(00:20):
FDA Commissioner and president of the Center for Medicine in
the Public Interest Peter Pitts. He just testified before Congress
about how hospitals are driving the cost of healthcare. First
of all, Peter, welcome to the show.
Speaker 2 (00:34):
Why PUFA Facts are ever? Bring me on?
Speaker 1 (00:36):
Well, I think you know when you say, well, hospitals
are driving the cost people are like, well, of course
they are, that's where people go for expensive medical care.
But it's more than that. Explain how hospitals are actually
creating and driving some of the health care increases that
we're seeing right now.
Speaker 3 (00:53):
You know, when we talk about, you know, out of
control healthcare costs in this country, people generally assume that, well,
it's the price of drug does that drive health care costs?
Speaker 2 (01:01):
And that's wrong.
Speaker 3 (01:02):
Drugs are about a little bit more than a dime
on the dollar of health care costs. I think they're
a great deal. Hospitals are over thirty percent. It's the
biggest cut of health care spending in this country. So
that's kind of point one. Point two is where does
the money that we pay hospitals go? And the answer
isn't always to doctors and to buy new MRI machines
and to pay nurses more and to add to the
(01:25):
patient experience as it should be. Oftentimes, where the money
goes is to pay administrators multi millions of dollars a
year per persons out.
Speaker 2 (01:36):
It's outrageous, you know.
Speaker 3 (01:37):
And hospitals get to pass because people see them as
the good guys in the community.
Speaker 2 (01:42):
Their names are on the back of Little League uniforms.
Speaker 3 (01:45):
But when you look at how they spend money, there's
enough to make a lot of people very angry because
it doesn't necessarily go towards quality care.
Speaker 1 (01:54):
So let me talk about a couple of different angles
about this. Because back when I was a kid, you
had a hospital that existed in your community, and it
was there for critical care, you know, difficult problems, cancer treatments,
and surgeries. Now hospitals own my doctor's office that I
go to. Hospitals are buying surgical centers hospitals are buying
urgent care centers. Why is that and how does that
(02:16):
distort the healthcare market?
Speaker 3 (02:20):
Well, distort is exactly the right word, and to make
you even angrier, it makes even more confusing. It's not
just for profit hospitals that are buying doctor's offices for example,
I'm going into urgent care centers. It's not for profit
hospitals as well. And most hospitals in this country are
at least technically speaking, not for profit. But when you
look at the way they do business, it's sure like
(02:41):
it sure looks like a for profit business, right down
to how much they pay their non medical administrators.
Speaker 1 (02:48):
So how what is the incentive? Why did this start?
Why did we start moving down this path? And I'm
going to call it hospital consolidation for lack of the
better way to put it, because they're essentially consolidating everything
in a community under their umbrella. Why is that beneficial
to a hospital? You know, chain or whatever you want
to call it.
Speaker 2 (03:09):
You know, that's exactly right.
Speaker 3 (03:11):
So you have to ask yourself, why is where's where's
the value in consolidation? And the value in consolidation is
the massive amounts of money that hospitals bill the government
and private insurance companies and they get reimbursed with with
no questions asked, And you ask yourself, how does this happen?
You know, where's the where's the oversight? And then you
(03:31):
look at the line item in most large hospital systems
budgets both not for profit and for profit of basically lobbying,
and what you see is that these hospitals are spending
millions of dollars a year lobbying state government, lobbying the
federal government to get sweetheart deals.
Speaker 2 (03:48):
So even though you.
Speaker 3 (03:49):
Know they look like the good guys and get and
don't get me wrong, you're the doctors and the nurses
and the text work at hospitals really are healthcare heroes.
I'm talking about the administrators were absolutely taking advantage of
the system in many respects to line their own pockets
and get six figure salaries, whether their for profit hospitals
or adopted profit quote unquote charity hospitals.
Speaker 1 (04:08):
So once they buy everything up, what does this do
when they're negotiating with insurance companies on rates and things
of that nature. Because if they're thirty percent of what
we're spending and now hospital covers primary care covers all
your basic obgyn visits, and all that stuff is now
under that hospital umbrella. What does this do to the
way they negotiate rates with insurance companies, which are basically
(04:31):
the main driver of health insurance costs.
Speaker 3 (04:35):
That's a really smart question, because they're in coahuts with
each other. And when you lessen the degree of competition,
when there are a fewer players, the larger players who
are left work together to make sure that costs are
as high as possible. Right, everybody a bigger piece of
a bigger pie, and the person that gets stuck holding
the bag is the consumer wins up with higher insurance
(04:58):
payment rates. Now, what's in is that when you go
to the hospital and you run up, let's say, fifty
thousand dollars in healthcare costs because you had a heart attack,
and you don't see that bill. You know you don't
see I mean, if you asked, you'll give you the itomization.
But most people don't. All they see is your charge
was fifty seven thousand dollars, you owe seven hundred and
(05:18):
fifty dollars.
Speaker 2 (05:19):
People go, wow, this is great. I've got this great.
Speaker 3 (05:21):
Care only cost me seven hundred and fifty dollars, and
they don't realize that that the money is being really
vacuumed out of the system to fund these enormous hospital
organizations who are in essence paying themselves these huge salaries
through these monopolistic types of pricing situations.
Speaker 1 (05:35):
So you're not giving me a lot of hope that
there's going to be any any big changes right now.
I actually have been working since I got my first
show in two thousand and five, and I've been thinking
about this. I read all of the iterations of the
Affordable Care Act, and I used to sell health insurance,
and when this bill was passed, I said, there's nothing
in this bill to control costs. Right there was nothing
(05:58):
in the entire Affordable Care Act to address the underlying
drivers of the high cost of health insurance. So now
we've even made it worse by allowing these hospital consolidations
to happen. How do we even begin to address this?
And I want to throw this at you. One of
the things that seems to me would be the most
logical and rational would be to simply make the edict
that you cannot charge anybody more for a service than
(06:21):
you're charging anybody else, Like medicine is the only area
where you can go get your appendix taken out and
it can cost fifteen thousand dollars. And I can get
mine taken out and it can cost thirty thousand dollars.
That would be insane in any other business, and yet
it is standard procedure in medicine. How much of that
is part of the problem, the huge part of the problem.
Speaker 3 (06:43):
The problem is that these large hospital systems and large
insurance companies are in this together. And the problem is
and I think that the solution is there is no transparency.
Speaker 2 (06:55):
All this is hidden.
Speaker 3 (06:56):
No one sees what's happening behind closed doors. Part of
the solution is to make sure or that there's oversight
and not necessarily from the fits, but from state government,
to make sure that hospitals operating in any given state,
you know, it is under the regular scrutiny of regulators
who want to know what's going on, that basic fair
business practices are being followed because they're not. And you
(07:18):
look at the line item and a lot of these
hospitals budgets, the line item for lobbying is enormous. And
that's not a mistake. You know, it's not to buy
little uniforms. It's not to paint the color of the
parking lot brighter for safer parking. It's political lobbying one
hundred percent. And the only reason out their lobbying is
because they want to protect their ability to many respects,
(07:38):
rape the system and earn as much money as they
can as quickly as they can, without being transparent at all.
So part of the solution here is looking where the
problem is and giving state level local authority the ability
to make a difference well ask the tough questions.
Speaker 1 (07:54):
Here in Colorado, they passed to bills several years ago
that I was really excited about, and it is a
medical transparency bill that you have to as a medical system,
post all of your information. You're pricing everything online. Now,
if we had a functioning free market with healthcare, then
some enterprising person would use that data to pull together
on an app where you could check and see, oh,
(08:15):
I can go to Baptists and get this done for
ten grand I can go here and get it done
for fifteen thousand. But we've created such a level of
obfuscation around everything medical and I think people are comfortable
enough with the devil. They know that they don't want
to dip their toe into something that's new and different.
In case, in point to what you're saying about lobbying,
(08:36):
I'm very involved in the direct primary care movement. I
think it is the wave of the future and can
save people a tremendous amount of money. And when they
were just trying to get a bill passed where they
could say, look, you can use your HSA money to
pay for your direct primary care, all of the big
players showed up against it. All of the hospital systems
showed up against something that should have no impact on
(08:58):
them whatsoever in the grand scate of things. And yet
they all had their lobbyists there to say, no, you
can't do this because somehow it's going to harm us,
which is insane.
Speaker 3 (09:09):
You know, hospitals have the ability to say, you know,
we're the good guys here.
Speaker 2 (09:12):
You know, we're we're foundational bedrock members of our community.
Speaker 3 (09:17):
And then when you try to say, well, why are
you charging different people different prices for the same procedure
based on their ability to pay, or the time of
day or the.
Speaker 2 (09:26):
Urges here of their care.
Speaker 3 (09:27):
Oh no, no, no, you know we're doing the best that
we can. You know, we need more federal funding. You know,
we're under tremendous amounts of squeezing. We have to cut staffing. Meanwhile,
executive staffing isn't being cut. Nurses are being cut, tests
are being cut, Doctors are being cut. But when you
look at the where the fat is in the CEO suite,
they're giving themselves literally six figure bonuses at the end
(09:48):
of the year.
Speaker 2 (09:48):
So you I gotta follow the.
Speaker 3 (09:49):
Morning to recognize the games that are being played here.
Speaker 1 (09:52):
Now, does your organization, the Center for Medicine and the
Public Interest, do you have available like if I wanted
to get behind or try we have a if very
robust citizen initiative process here in Colorado, if I wanted
to put some kind of initiative on the ballot, do
you have ballot language that would be available for someone
to move some of these things forward? Because my thinking
(10:12):
is if you could just get that one thing, like, hey,
you know what, whatever you're charging Bob over there, you're
not going to charge me anything more. I think that's
an easy way to help people begin to understand how
the system is rigged. And just getting them to understand
how it's rigged is like half the battle.
Speaker 2 (10:30):
I agree with that.
Speaker 3 (10:30):
In fact, on our website, which will give myself a
shameless plug, which is CMPI dot org, we've looked at
a number of different states and how their hospital systems
are really defrauding public dollars and patient dollars as well.
And the next step, to your point, is to draft
good legislation that states can model and use to get
their hospital system under control. But I think that the
(10:50):
headline here is states.
Speaker 2 (10:52):
Have to do it locally.
Speaker 3 (10:53):
If you let the Fedes do it, nothing's going to happen.
The lobbying power of hospitals is too enormous to fight
on a national law. Hard enough on the local state level,
right almost on the federal level. But it's time to
start doing that to your point, So.
Speaker 1 (11:06):
Yeah, I mean, is that something that's coming soon, because
I'm ready. I'm ready, Peter, let's do it. Let's it's
time to do something aggressive and different and help people
understand that the status quo does not have to be
the status quo.
Speaker 3 (11:20):
I totally agree on some states are doing a better
job than others. So you know, I guess to your
point that maybe the next topic on our to do
list is to show some nonl state legislation that could
get some good to headlines and try it out in
other states as well, with the obvious kind of caveat
that each state has to personalize mis legislation for their
own needs. But you know, sooner or rather than the
later two points really completely out of control.
Speaker 1 (11:42):
I just think it's it would be a fascinating comparison
to be able to really understand the differences here and
how much underimbursements with Medicare and Medicaid or just cost
spread their cost shifted to everybody else. We're paying the
extra freight on those and I just think this is
such a complex issue and people just want to be
able to go or the doctor when they need it, right,
They're just like I just want to be able. I
(12:03):
want a hospital to be there when I need it.
Speaker 3 (12:07):
A key point to look at it if you look
at the various reports on the c MPI website. We
look at executive salaries, you know, at it through a
host of states, and the executive salaries for not for
profit hospitals, which are the majority of hospitals in this country,
are well into the six figures across the board. You
have to ask yourself what is wrong with this picture.
Speaker 1 (12:26):
Well, do you guys address certificates of need, the sort
of false scarcity that is created when a new healthcare
provider wants to come into a market, they have to
demonstrate that the need exists before they're allowed to come
into the market. If they use that same strategy for
car washes, my community would be much different because we
have seven thousand car washes. But guess what, I can
(12:49):
get a car wash.
Speaker 2 (12:50):
Cheap if I want it.
Speaker 1 (12:51):
Why don't we do the same kind of like inject
more competition into the system.
Speaker 3 (12:56):
You know, competition is what large you know, not ballistic
organizations are most afraid of for obvious reasons. And you know,
and what we did in our report is that we
looked at, as I mentioned earlier, the lobbying spending all
of these hospitals astounding, and they're not They're not lobbying
to make their hospitals bigger or to hire more doctors
and nurses. They're hired to make sure that no legislation
(13:18):
has passed that in any way stops them from making
money hand over fist any which way they can, including
to your point, limiting competition, which is a huge part
of this conversation.
Speaker 1 (13:27):
Is there a difference between this the urban hospital situation
and we have rural hospitals that we're told we have
maternity deserts in Colorado where there is no maternity care
and people are driving hundreds of miles to.
Speaker 2 (13:38):
Have a baby.
Speaker 1 (13:39):
How how does that happen? How do we have a
disconnect where we have urban hospitals that are making a
huge profit and we have rural hospitals that they can't
stay open.
Speaker 2 (13:49):
Well, And you when you put.
Speaker 3 (13:50):
Rural hospitals or regional hospitals out of business, where does
that business go?
Speaker 2 (13:55):
Yeah, it doesn't go well.
Speaker 3 (13:56):
It simply forces people into their cars to drive to
the city get their care at large centers which are
a lot more expensive and where all the overhead is
significantly higher.
Speaker 2 (14:06):
So, you know, a.
Speaker 3 (14:07):
Good kind of marker of the problem is the less ability.
You know, the fewer local hospitals are kind of the
traditional local hospital as they disappear you self, Why is that?
And it's not because the need isn't there. It's because
the opportunity to make money by taking business away from
local hospitals to a larger urban center are there. It's
and those opportunities are taken aggressively and robustly and regularly,
(14:31):
and it is a crime against the public that these
things will continue to happen without any legislative oversight whatsoever.
Speaker 1 (14:38):
So how do we fix that issue specifically because here
in Colorado that's significant.
Speaker 3 (14:43):
Well, you know, the first thing to do is that
legislators have to say, this is a problem, we recognize it,
and how do we fix it? Okay, does is soundly difficult,
except that when you look at the amount of lobbying
dollars paid by large hospitals in states to state level politicians,
there's a there's a lot of there are a lot
of palm being greased, let me put it to that way.
Speaker 1 (15:02):
But but that doesn't necessarily answer my question about how
to address that other than saying you're getting your palms greased?
I mean, are there are there steps that we can
use to solve that problem at the same time that
we're trying to address I mean, I guess maybe we'll
handle that when it comes up later.
Speaker 2 (15:19):
That's what I mean.
Speaker 3 (15:21):
The big the big headline there is transparency, right, make
these things when you shame people on their behavior, that's
the first step, and then you can take legislative action
to fix it.
Speaker 2 (15:30):
Because you have public support.
Speaker 3 (15:32):
What I was trying to mention for about kind of
palms being greased is that nothing is happening from nothing
is happening from a legislative perspective, not because legislators are
stupid because they don't know what's going on, is because
they're purposely being incentivized, shall we say, you know, not
to do anything, to look the other way, to allow
the status quotes to remain in place. And as you said,
(15:53):
most people don't reach into their pockets to pay the
full cost of hospital care. But that doesn't mean that
the amounts of money being sucked out of the system. Yeah,
both for profit and especially for non for profit hospitals,
we have they have the nerve to hide behind a
charity mission. You know, you know, it's being allowed to
happen by politicians who are being told to look the
other way.
Speaker 1 (16:13):
Peter Pitts is my guest. He is with the president.
He's president of the Center for Medicine in the Public Interests.
Very interesting conversation, Peter. It's one that is going to continue,
I'm sure, and one that I'm going to keep having
because we've got to do something and throwing more government
money at inflated prices. Is not what we need to
do at this point. I appreciate your time today, my pleasure.
Speaker 2 (16:36):
Thank you very much. Let's up on the fight together.
Speaker 1 (16:38):
Absolutely thanks. That's Peter Pitts.
We're talking about things that are ridiculously expensive. And my
next guest is on to talk about, well, what is
making healthcare so expensive? Health insurance is directly reflected in
how much health care costs. So what are driving the
costs of health care? And joining me now former Associate
(00:20):
FDA Commissioner and president of the Center for Medicine in
the Public Interest Peter Pitts. He just testified before Congress
about how hospitals are driving the cost of healthcare. First
of all, Peter, welcome to the show.
Speaker 2 (00:34):
Why PUFA Facts are ever? Bring me on?
Speaker 1 (00:36):
Well, I think you know when you say, well, hospitals
are driving the cost people are like, well, of course
they are, that's where people go for expensive medical care.
But it's more than that. Explain how hospitals are actually
creating and driving some of the health care increases that
we're seeing right now.
Speaker 3 (00:53):
You know, when we talk about, you know, out of
control healthcare costs in this country, people generally assume that, well,
it's the price of drug does that drive health care costs?
Speaker 2 (01:01):
And that's wrong.
Speaker 3 (01:02):
Drugs are about a little bit more than a dime
on the dollar of health care costs. I think they're
a great deal. Hospitals are over thirty percent. It's the
biggest cut of health care spending in this country. So
that's kind of point one. Point two is where does
the money that we pay hospitals go? And the answer
isn't always to doctors and to buy new MRI machines
and to pay nurses more and to add to the
(01:25):
patient experience as it should be. Oftentimes, where the money
goes is to pay administrators multi millions of dollars a
year per persons out.
Speaker 2 (01:36):
It's outrageous, you know.
Speaker 3 (01:37):
And hospitals get to pass because people see them as
the good guys in the community.
Speaker 2 (01:42):
Their names are on the back of Little League uniforms.
Speaker 3 (01:45):
But when you look at how they spend money, there's
enough to make a lot of people very angry because
it doesn't necessarily go towards quality care.
Speaker 1 (01:54):
So let me talk about a couple of different angles
about this. Because back when I was a kid, you
had a hospital that existed in your community, and it
was there for critical care, you know, difficult problems, cancer treatments,
and surgeries. Now hospitals own my doctor's office that I
go to. Hospitals are buying surgical centers hospitals are buying
urgent care centers. Why is that and how does that
(02:16):
distort the healthcare market?
Speaker 3 (02:20):
Well, distort is exactly the right word, and to make
you even angrier, it makes even more confusing. It's not
just for profit hospitals that are buying doctor's offices for example,
I'm going into urgent care centers. It's not for profit
hospitals as well. And most hospitals in this country are
at least technically speaking, not for profit. But when you
look at the way they do business, it's sure like
(02:41):
it sure looks like a for profit business, right down
to how much they pay their non medical administrators.
Speaker 1 (02:48):
So how what is the incentive? Why did this start?
Why did we start moving down this path? And I'm
going to call it hospital consolidation for lack of the
better way to put it, because they're essentially consolidating everything
in a community under their umbrella. Why is that beneficial
to a hospital? You know, chain or whatever you want
to call it.
Speaker 2 (03:09):
You know, that's exactly right.
Speaker 3 (03:11):
So you have to ask yourself, why is where's where's
the value in consolidation? And the value in consolidation is
the massive amounts of money that hospitals bill the government
and private insurance companies and they get reimbursed with with
no questions asked, And you ask yourself, how does this happen?
You know, where's the where's the oversight? And then you
(03:31):
look at the line item in most large hospital systems
budgets both not for profit and for profit of basically lobbying,
and what you see is that these hospitals are spending
millions of dollars a year lobbying state government, lobbying the
federal government to get sweetheart deals.
Speaker 2 (03:48):
So even though you.
Speaker 3 (03:49):
Know they look like the good guys and get and
don't get me wrong, you're the doctors and the nurses
and the text work at hospitals really are healthcare heroes.
I'm talking about the administrators were absolutely taking advantage of
the system in many respects to line their own pockets
and get six figure salaries, whether their for profit hospitals
or adopted profit quote unquote charity hospitals.
Speaker 1 (04:08):
So once they buy everything up, what does this do
when they're negotiating with insurance companies on rates and things
of that nature. Because if they're thirty percent of what
we're spending and now hospital covers primary care covers all
your basic obgyn visits, and all that stuff is now
under that hospital umbrella. What does this do to the
way they negotiate rates with insurance companies, which are basically
(04:31):
the main driver of health insurance costs.
Speaker 3 (04:35):
That's a really smart question, because they're in coahuts with
each other. And when you lessen the degree of competition,
when there are a fewer players, the larger players who
are left work together to make sure that costs are
as high as possible. Right, everybody a bigger piece of
a bigger pie, and the person that gets stuck holding
the bag is the consumer wins up with higher insurance
(04:58):
payment rates. Now, what's in is that when you go
to the hospital and you run up, let's say, fifty
thousand dollars in healthcare costs because you had a heart attack,
and you don't see that bill. You know you don't
see I mean, if you asked, you'll give you the itomization.
But most people don't. All they see is your charge
was fifty seven thousand dollars, you owe seven hundred and
(05:18):
fifty dollars.
Speaker 2 (05:19):
People go, wow, this is great. I've got this great.
Speaker 3 (05:21):
Care only cost me seven hundred and fifty dollars, and
they don't realize that that the money is being really
vacuumed out of the system to fund these enormous hospital
organizations who are in essence paying themselves these huge salaries
through these monopolistic types of pricing situations.
Speaker 1 (05:35):
So you're not giving me a lot of hope that
there's going to be any any big changes right now.
I actually have been working since I got my first
show in two thousand and five, and I've been thinking
about this. I read all of the iterations of the
Affordable Care Act, and I used to sell health insurance,
and when this bill was passed, I said, there's nothing
in this bill to control costs. Right there was nothing
(05:58):
in the entire Affordable Care Act to address the underlying
drivers of the high cost of health insurance. So now
we've even made it worse by allowing these hospital consolidations
to happen. How do we even begin to address this?
And I want to throw this at you. One of
the things that seems to me would be the most
logical and rational would be to simply make the edict
that you cannot charge anybody more for a service than
(06:21):
you're charging anybody else, Like medicine is the only area
where you can go get your appendix taken out and
it can cost fifteen thousand dollars. And I can get
mine taken out and it can cost thirty thousand dollars.
That would be insane in any other business, and yet
it is standard procedure in medicine. How much of that
is part of the problem, the huge part of the problem.
Speaker 3 (06:43):
The problem is that these large hospital systems and large
insurance companies are in this together. And the problem is
and I think that the solution is there is no transparency.
Speaker 2 (06:55):
All this is hidden.
Speaker 3 (06:56):
No one sees what's happening behind closed doors. Part of
the solution is to make sure or that there's oversight
and not necessarily from the fits, but from state government,
to make sure that hospitals operating in any given state,
you know, it is under the regular scrutiny of regulators
who want to know what's going on, that basic fair
business practices are being followed because they're not. And you
(07:18):
look at the line item and a lot of these
hospitals budgets, the line item for lobbying is enormous. And
that's not a mistake. You know, it's not to buy
little uniforms. It's not to paint the color of the
parking lot brighter for safer parking. It's political lobbying one
hundred percent. And the only reason out their lobbying is
because they want to protect their ability to many respects,
(07:38):
rape the system and earn as much money as they
can as quickly as they can, without being transparent at all.
So part of the solution here is looking where the
problem is and giving state level local authority the ability
to make a difference well ask the tough questions.
Speaker 1 (07:54):
Here in Colorado, they passed to bills several years ago
that I was really excited about, and it is a
medical transparency bill that you have to as a medical system,
post all of your information. You're pricing everything online. Now,
if we had a functioning free market with healthcare, then
some enterprising person would use that data to pull together
on an app where you could check and see, oh,
(08:15):
I can go to Baptists and get this done for
ten grand I can go here and get it done
for fifteen thousand. But we've created such a level of
obfuscation around everything medical and I think people are comfortable
enough with the devil. They know that they don't want
to dip their toe into something that's new and different.
In case, in point to what you're saying about lobbying,
(08:36):
I'm very involved in the direct primary care movement. I
think it is the wave of the future and can
save people a tremendous amount of money. And when they
were just trying to get a bill passed where they
could say, look, you can use your HSA money to
pay for your direct primary care, all of the big
players showed up against it. All of the hospital systems
showed up against something that should have no impact on
(08:58):
them whatsoever in the grand scate of things. And yet
they all had their lobbyists there to say, no, you
can't do this because somehow it's going to harm us,
which is insane.
Speaker 3 (09:09):
You know, hospitals have the ability to say, you know,
we're the good guys here.
Speaker 2 (09:12):
You know, we're we're foundational bedrock members of our community.
Speaker 3 (09:17):
And then when you try to say, well, why are
you charging different people different prices for the same procedure
based on their ability to pay, or the time of
day or the.
Speaker 2 (09:26):
Urges here of their care.
Speaker 3 (09:27):
Oh no, no, no, you know we're doing the best that
we can. You know, we need more federal funding. You know,
we're under tremendous amounts of squeezing. We have to cut staffing. Meanwhile,
executive staffing isn't being cut. Nurses are being cut, tests
are being cut, Doctors are being cut. But when you
look at the where the fat is in the CEO suite,
they're giving themselves literally six figure bonuses at the end
(09:48):
of the year.
Speaker 2 (09:48):
So you I gotta follow the.
Speaker 3 (09:49):
Morning to recognize the games that are being played here.
Speaker 1 (09:52):
Now, does your organization, the Center for Medicine and the
Public Interest, do you have available like if I wanted
to get behind or try we have a if very
robust citizen initiative process here in Colorado, if I wanted
to put some kind of initiative on the ballot, do
you have ballot language that would be available for someone
to move some of these things forward? Because my thinking
(10:12):
is if you could just get that one thing, like, hey,
you know what, whatever you're charging Bob over there, you're
not going to charge me anything more. I think that's
an easy way to help people begin to understand how
the system is rigged. And just getting them to understand
how it's rigged is like half the battle.
Speaker 2 (10:30):
I agree with that.
Speaker 3 (10:30):
In fact, on our website, which will give myself a
shameless plug, which is CMPI dot org, we've looked at
a number of different states and how their hospital systems
are really defrauding public dollars and patient dollars as well.
And the next step, to your point, is to draft
good legislation that states can model and use to get
their hospital system under control. But I think that the
(10:50):
headline here is states.
Speaker 2 (10:52):
Have to do it locally.
Speaker 3 (10:53):
If you let the Fedes do it, nothing's going to happen.
The lobbying power of hospitals is too enormous to fight
on a national law. Hard enough on the local state level,
right almost on the federal level. But it's time to
start doing that to your point, So.
Speaker 1 (11:06):
Yeah, I mean, is that something that's coming soon, because
I'm ready. I'm ready, Peter, let's do it. Let's it's
time to do something aggressive and different and help people
understand that the status quo does not have to be
the status quo.
Speaker 3 (11:20):
I totally agree on some states are doing a better
job than others. So you know, I guess to your
point that maybe the next topic on our to do
list is to show some nonl state legislation that could
get some good to headlines and try it out in
other states as well, with the obvious kind of caveat
that each state has to personalize mis legislation for their
own needs. But you know, sooner or rather than the
later two points really completely out of control.
Speaker 1 (11:42):
I just think it's it would be a fascinating comparison
to be able to really understand the differences here and
how much underimbursements with Medicare and Medicaid or just cost
spread their cost shifted to everybody else. We're paying the
extra freight on those and I just think this is
such a complex issue and people just want to be
able to go or the doctor when they need it, right,
They're just like I just want to be able. I
(12:03):
want a hospital to be there when I need it.
Speaker 3 (12:07):
A key point to look at it if you look
at the various reports on the c MPI website. We
look at executive salaries, you know, at it through a
host of states, and the executive salaries for not for
profit hospitals, which are the majority of hospitals in this country,
are well into the six figures across the board. You
have to ask yourself what is wrong with this picture.
Speaker 1 (12:26):
Well, do you guys address certificates of need, the sort
of false scarcity that is created when a new healthcare
provider wants to come into a market, they have to
demonstrate that the need exists before they're allowed to come
into the market. If they use that same strategy for
car washes, my community would be much different because we
have seven thousand car washes. But guess what, I can
(12:49):
get a car wash.
Speaker 2 (12:50):
Cheap if I want it.
Speaker 1 (12:51):
Why don't we do the same kind of like inject
more competition into the system.
Speaker 3 (12:56):
You know, competition is what large you know, not ballistic
organizations are most afraid of for obvious reasons. And you know,
and what we did in our report is that we
looked at, as I mentioned earlier, the lobbying spending all
of these hospitals astounding, and they're not They're not lobbying
to make their hospitals bigger or to hire more doctors
and nurses. They're hired to make sure that no legislation
(13:18):
has passed that in any way stops them from making
money hand over fist any which way they can, including
to your point, limiting competition, which is a huge part
of this conversation.
Speaker 1 (13:27):
Is there a difference between this the urban hospital situation
and we have rural hospitals that we're told we have
maternity deserts in Colorado where there is no maternity care
and people are driving hundreds of miles to.
Speaker 2 (13:38):
Have a baby.
Speaker 1 (13:39):
How how does that happen? How do we have a
disconnect where we have urban hospitals that are making a
huge profit and we have rural hospitals that they can't
stay open.
Speaker 2 (13:49):
Well, And you when you put.
Speaker 3 (13:50):
Rural hospitals or regional hospitals out of business, where does
that business go?
Speaker 2 (13:55):
Yeah, it doesn't go well.
Speaker 3 (13:56):
It simply forces people into their cars to drive to
the city get their care at large centers which are
a lot more expensive and where all the overhead is
significantly higher.
Speaker 2 (14:06):
So, you know, a.
Speaker 3 (14:07):
Good kind of marker of the problem is the less ability.
You know, the fewer local hospitals are kind of the
traditional local hospital as they disappear you self, Why is that?
And it's not because the need isn't there. It's because
the opportunity to make money by taking business away from
local hospitals to a larger urban center are there. It's
and those opportunities are taken aggressively and robustly and regularly,
(14:31):
and it is a crime against the public that these
things will continue to happen without any legislative oversight whatsoever.
Speaker 1 (14:38):
So how do we fix that issue specifically because here
in Colorado that's significant.
Speaker 3 (14:43):
Well, you know, the first thing to do is that
legislators have to say, this is a problem, we recognize it,
and how do we fix it? Okay, does is soundly difficult,
except that when you look at the amount of lobbying
dollars paid by large hospitals in states to state level politicians,
there's a there's a lot of there are a lot
of palm being greased, let me put it to that way.
Speaker 1 (15:02):
But but that doesn't necessarily answer my question about how
to address that other than saying you're getting your palms greased?
I mean, are there are there steps that we can
use to solve that problem at the same time that
we're trying to address I mean, I guess maybe we'll
handle that when it comes up later.
Speaker 2 (15:19):
That's what I mean.
Speaker 3 (15:21):
The big the big headline there is transparency, right, make
these things when you shame people on their behavior, that's
the first step, and then you can take legislative action
to fix it.
Speaker 2 (15:30):
Because you have public support.
Speaker 3 (15:32):
What I was trying to mention for about kind of
palms being greased is that nothing is happening from nothing
is happening from a legislative perspective, not because legislators are
stupid because they don't know what's going on, is because
they're purposely being incentivized, shall we say, you know, not
to do anything, to look the other way, to allow
the status quotes to remain in place. And as you said,
(15:53):
most people don't reach into their pockets to pay the
full cost of hospital care. But that doesn't mean that
the amounts of money being sucked out of the system. Yeah,
both for profit and especially for non for profit hospitals,
we have they have the nerve to hide behind a
charity mission. You know, you know, it's being allowed to
happen by politicians who are being told to look the
other way.
Speaker 1 (16:13):
Peter Pitts is my guest. He is with the president.
He's president of the Center for Medicine in the Public Interests.
Very interesting conversation, Peter. It's one that is going to continue,
I'm sure, and one that I'm going to keep having
because we've got to do something and throwing more government
money at inflated prices. Is not what we need to
do at this point. I appreciate your time today, my pleasure.
Speaker 2 (16:36):
Thank you very much. Let's up on the fight together.
Speaker 1 (16:38):
Absolutely thanks. That's Peter Pitts.
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