For too long, Washington has talked about the high cost of healthcare while tiptoeing around one of its biggest drivers: hospital prices. That is finally beginning to change, however, as both Congress and the Trump administration have been taking serious steps to bring transparency and accountability to America’s hospital industry, especially the nonprofit hospitals that receive enormous public subsidies since they are legally classified as charities.
Hospitals do extraordinary work every day, to be sure. Admiration for the lifesaving work of medical professionals, however, does not mean turning a blind eye to the business practices of large hospital systems when they hurt the very patients they exist to serve.
I’m very proud of my work in the healthcare space during my time in Congress, which included the Republican-led efforts to repeal Obama-era policies that drove up healthcare costs for millions of Americans. My colleagues and I didn’t have hospital prices on our radar so much at the time, since they were so much lower 20 years ago.
Research from Rice University’s Baker Institute found that hospital prices increased more than 220% between 2000 and 2022, compared with overall inflation of about 74%. Importantly, hospital prices sit near the beginning of the healthcare cost chain. Insurance costs, in other words, mathematically stem from the prices set by pharmaceutical companies and hospitals.
Hospital chargemasters and opaque negotiated rates have historically produced prices bearing little relationship to the actual cost or quality of care. Two patients can receive essentially the same procedure and generate dramatically different bills depending on where they went and what insurance card they carried. That is not a functioning market, which requires clarity in pricing, and the problem only gets worse when you look at the major, urban, tax-exempt hospitals.
Nonprofit hospitals make up nearly 60% of America’s community hospitals. They receive substantial federal, state, and local tax advantages because society has decided that charitable institutions serving their communities deserve special treatment. That’s a reasonable bargain, but tax exemption isn’t supposed to be a participation trophy. If an organization receives the privileges of a charity, taxpayers have every right to ask whether it is behaving like one, and the numbers on nonprofit hospitals’ tax returns raise serious questions.
A Lown Institute analysis examined 1,773 nonprofit hospitals and compared their estimated tax exemptions with their spending on financial assistance and meaningful community investment. It found that 77% spent less on direct community benefits than the estimated value of their tax breaks. The combined difference, which researchers call the hospitals’ “fair share deficit,” was $14.2 billion in a single year. That is enough money to erase the medical debt of roughly 18 million Americans.
Even some of the charity care that major nonprofit hospitals do isn’t all it’s cracked up to be. Hospitals frequently argue that their community contribution is substantially larger when Medicaid shortfalls and other categories are included. For example, Medicaid pays about $350 for a routine diagnostic colonoscopy. Meanwhile, nonprofit hospitals will charge between $1,200 and $10,000 for the same procedure. Then, once they accept the Medicaid payment, the hospital writes off the difference as “charity care” on their balance sheets. That looks much more like cooking the books than benefiting the community.
Cleveland Clinic posted over $1 billion in net income in 2024; New York-Presbyterian made $547 million; and the Mayo Clinic made a profit of $1.6 billion. Again, these are world-class institutions that do enormously important work, but these are not acceptable profits for nonprofit institutions.
President Donald Trump has been right to make hospital price transparency a priority. The administration has strengthened federal requirements so hospitals must disclose more useful information about the actual prices negotiated with insurers rather than hiding behind estimates or opaque formulas.
Beginning in 2026, hospitals must report additional actual pricing information in their machine-readable files, and a hospital CEO, president, or designated senior official must be identified as responsible for overseeing the accuracy and completeness of that information. The Centers for Medicare & Medicaid Services began enforcing those new requirements in April.
At the state level, even states like Texas with extremely strong hospital accountability legislation on the books are failing to enforce price transparency laws, which is why Trump included more than 40 hospitals in the state on the list of more than 500 hospitals he warned about following federal price transparency laws. In states without any legislation holding hospitals accountable, the situation is even worse.
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Both Republicans and Democrats in Washington must continue to push for reform in hospital pricing practices. If a rural hospital is barely keeping its doors open while another tax-exempt health system is accumulating enormous surpluses, policymakers should not pretend that those institutions present the same public policy question.
America does not have to choose between world-class hospitals and affordable healthcare. New, stronger legislation would be helpful, but stronger enforcement of existing laws is absolutely essential, and it is low-hanging fruit.
Robert Pittenger served as the U.S. representative for North Carolina’s 9th Congressional District from 2013 to 2019.