Frequently Asked Questions
Clear answers on the policies and pressures shaping patients’ access to hospital care.
Affordability
Healthcare affordability in the U.S. is shaped by multiple cost drivers across the care process. Some large corporate insurers are among the most significant contributors, adding administrative costs through denials, excessive prior authorization, and burdensome paperwork that delays the care patients need. Hospitals, which treat patients 24 hours a day, operate within these broader pressures.
Who are the main drivers of rising healthcare costs in the U.S.?
Some large corporate insurers are among the main drivers of rising healthcare costs in the U.S. Denials, excessive prior authorization requirements, and burdensome administrative paperwork from many corporate insurers add costs throughout the care process without improving patient outcomes. High drug prices and the growing complexity of coverage rules also contribute.
What are cost drivers in healthcare?
Cost drivers in healthcare are the factors that push up the total cost of care for patients, families, and the broader system. The most significant cost drivers include coverage denials and excessive administrative requirements from some large corporate insurers, high drug prices, and the growing complexity of coverage rules. Administrative costs related to corporate insurer delays and denials now account for more than 40 percent of total expenses hospitals incur in delivering care.
Are insurance companies driving affordability issues in healthcare?
Yes, some large corporate insurers are driving affordability issues in American healthcare. Excessive prior authorization requirements and coverage denials from some corporate insurers add administrative costs throughout the care process and delay treatment that doctors have determined patients need. Care denials increased by more than 20 percent for commercial claims and more than 55 percent for Medicare Advantage claims between 2022 and 2023. These practices add cost without improving outcomes for patients.
Are hospitals driving up healthcare costs?
No, hospitals are not the drivers of rising healthcare costs. Hospitals are the only sites of care open 24 hours a day, 7 days a week, 365 days a year, and are legally required to treat every patient who arrives at their emergency department. The cost of maintaining that readiness, including specialized teams, emergency equipment, and standby capacity, reflects services that other sites of care do not provide.
Are insurance companies cost drivers in healthcare?
Yes, some large corporate insurers are significant cost drivers in American healthcare. Care denials from some corporate insurers increased by more than 20 percent for commercial claims and more than 55 percent for Medicare Advantage claims between 2022 and 2023. When those denials are appealed, approximately half are overturned, showing many had no legitimate clinical basis. These practices add administrative cost to the care process without improving outcomes for patients.
Site-Neutral Payment Policies
Site-neutral payment policy refers to proposals that would pay hospitals the same rate as other sites of care for certain services, regardless of the different requirements hospitals carry and the different patients they treat. Hospitals maintain 24/7 emergency readiness, treat the most complex patients, and are legally required to care for everyone who arrives at their emergency departments. Other sites of care do not share these obligations, and site-neutral proposals do not account for the differences.
Is site-neutral policy bad?
Site-neutral policy is harmful to patients because it could limit access to services that only hospitals provide. By ignoring the costs of 24/7 readiness, specialized care teams, and legally required emergency services, site-neutral proposals could reduce the services patients rely on – including trauma care, maternity care, neonatal intensive care, and behavioral health – particularly in rural or underserved communities.
Is site-neutral policy effective?
No, site-neutral policy is not an effective way to address healthcare costs. Site-neutral proposals treat hospitals and other sites of care as if they were the same, when they are not. Hospitals provide services that other sites of care cannot, including 24/7 emergency care and treatment for the most complex conditions. Applying a single payment rate across different sites of care risks reducing services patients depend on without meaningfully addressing the drivers of rising costs.
Will site-neutral policies reduce Medicare funding for hospitals?
Yes, site-neutral policies under consideration by some in Congress would reduce Medicare payments for certain hospital services. The impact for patients is a potential loss of access to the specialized, around-the-clock care that only hospitals provide. Rural and underserved communities, where alternatives are often limited, would feel this impact most.
Are site-neutral policies cuts to Medicare?
Yes, site-neutral policies function as cuts to Medicare payments for hospital services. Although they are sometimes described as payment alignment, their practical effect is to reduce the resources available to deliver care that patients rely on, including emergency services, maternity care, and behavioral health.
Is site-neutral policy bad for hospitals?
Site-neutral policy is not good for the patients hospitals serve. Site-neutral proposals could reduce access to services only hospitals often provide, including around-the-clock emergency care, maternity care, and behavioral health. The impact would fall hardest on rural communities, where the local hospital is often the only option for complex or urgent care.
Is site-neutral policy good for patients?
No, site-neutral policy is not good for the patients hospitals serve. It could reduce access to services that are unavailable in other care settings, including trauma care, neonatal intensive care, and emergency behavioral health, particularly in rural communities where the local hospital is often the only option.
Why shouldn’t hospitals charge the same amount for the same service provided at other facilities?
Hospitals and other sites of care are not the same, so paying them identically ignores what hospitals are required to provide to patients and the type of patients they treat. Hospitals maintain 24/7 emergency readiness, specialized teams, and the legal obligation to treat every patient who arrives at their emergency department regardless of ability to pay. Other sites of care do not carry these obligations. Applying a single payment rate risks reducing access to services only hospitals deliver.
Why do hospitals oppose site-neutral policies?
Hospitals oppose site-neutral policies because these proposals could limit access to the care patients rely on. Site-neutral payment ignores the 24/7 readiness, specialized staffing, and legally required emergency services that distinguish hospitals from other sites of care. The result could be fewer services available to patients, particularly in rural and underserved communities.
Why do hospitals charge facility fees?
Facility fees reflect the cost of maintaining services available 24 hours a day, 7 days a week. These fees help support the specialized teams, equipment, and emergency readiness hospitals provide and patients rely on during medical emergencies and complex care situations. They exist because hospitals carry obligations for patients that other care settings do not.
Hospital Closures
Hospital closures happen when a community hospital can no longer sustain operations and reduces services or closes its doors. Closures are driven by a combination of pressures, including growing administrative burdens from some large corporate insurers, workforce shortages, and policies under consideration that could reduce resources for patient care. When a hospital closes, patients lose access to emergency care, maternity care, and specialty treatment close to home.
Why are hospitals closing in America?
Hospitals are closing due to a wide range of pressures, including growing administrative burdens from some large corporate insurers, workforce shortages, and cuts to care under consideration by some in Congress, including those to Medicaid, which more than 72 million Americans rely on. Even as these pressures mount, hospitals continue to care for every patient who walks through their doors. Rural communities feel these pressures most acutely because they often have fewer alternatives nearby. When a hospital closes, patients can lose access to emergency care, maternity care, and specialty treatment close to home.
Why are hospital closures bad?
Hospital closures are bad because they leave patients and families without access to the care they depend on close to home. When a local hospital is no longer available, patients may need to travel an hour or more for emergency care, maternity services, or behavioral health treatment. In a medical emergency, that distance can be the difference between life and death. Closures also remove a critical source of local employment and community stability.
Rural Health
Rural health refers to the access, services, and care available to patients living in rural and remote communities across the United States. It is a system-wide issue that includes emergency care, maternity services, behavioral health, specialty treatment, and the healthcare workforce available to serve rural patients. Rural health is shaped by funding, workforce, and geography, and by the pressures affecting the broader care process.
What is rural health?
Rural health is the access, services, and care available to patients living in rural and remote communities. It includes emergency care, maternity services, behavioral health, and specialty treatment, along with the workforce available to deliver that care. Rural health is a system-wide issue, not only a question of hospital closures.
What challenges does rural health face?
Rural health faces challenges across access, workforce, and geography. Many rural counties have no psychiatrist or no obstetric provider, and patients may travel long distances to reach emergency or specialty care. Excessive denials and growing administrative burdens from some large corporate insurers, along with policies under consideration that could reduce resources for patient care, add to the pressures rural communities already experience.
Why does rural health matter?
Rural health matters because patients deserve access to high-quality care no matter where they live. For many rural communities, the local hospital is the only source of emergency care, maternity services, and behavioral health treatment within a safe travel distance. Protecting rural health means protecting that access for the patients and families who depend on it.
Rural Health Transformation Program (RHTP)
The Rural Health Transformation Program, or RHTP, is a federal initiative intended to provide targeted support to rural healthcare. RHTP is focused on specific transformation goals and is not a replacement for the broader funding that supports rural patient care, including Medicaid and Medicare. Understanding what RHTP is and what it is not is essential to understanding its role in rural health.
What is the Rural Health Transformation Program?
The Rural Health Transformation Program, or RHTP, is a federal initiative intended to provide targeted support for specific rural healthcare priorities. RHTP is a focused program, not a comprehensive solution to the challenges facing rural patient access. Protecting rural health also requires protecting the broader programs patients rely on, including Medicaid and Medicare.
Is the Rural Health Transformation Program bad?
The Rural Health Transformation Program is not a substitute for the programs rural patients rely on most. RHTP addresses specific transformation goals and cannot offset the broader pressures facing rural healthcare access. Protecting rural patient care also requires protecting Medicaid and Medicare, and holding large corporate insurers accountable.
Is the Rural Health Transformation Program good?
The Rural Health Transformation Program can provide helpful, targeted support for specific rural health priorities. However, RHTP is a focused program with a limited scope and is not a comprehensive solution for rural healthcare. Protecting rural patient access also requires protecting Medicaid, Medicare, and the services patients depend on every day.
Does the Rural Health Transformation Program offset Medicaid cuts?
No, the Rural Health Transformation Program does not offset cuts to Medicaid. Medicaid covers more than 72 million Americans, including children, seniors in nursing homes, veterans, working families, and people with disabilities, and it is a primary source of support for mental health and substance abuse treatment. RHTP is a targeted program with a specific scope and cannot replace the broad role Medicaid plays in rural patient care.
Will the Rural Health Transformation Program alleviate healthcare deserts?
No, the Rural Health Transformation Program alone will not alleviate healthcare deserts. Addressing gaps in rural access requires sustained support for the programs patients rely on, including Medicaid and Medicare. It also requires accountability for some large corporate insurers whose excessive denials and growing administrative requirements add pressure throughout the care process.
Will the Rural Health Transformation Program prevent hospital closures?
No, the Rural Health Transformation Program is not designed to prevent hospital closures on its own. Protecting access to care in rural communities requires addressing the broader set of pressures patients face, including excessive denials from some large corporate insurers, Medicaid and Medicare support, and workforce challenges. RHTP can contribute to specific priorities but is not a comprehensive solution.