Hospital prices, and not mergers and organizational market power, are the reason for increasing costs in health care, according to a study by the American Hospital Association.
- Hospital prices are directly related to the cost of care.
- Spending on rapidly growing labor force explains a substantial proportion of overall costs to hospitals.
- Another factor in cost is the increased number of patients covered by Medicare and state programs; neither of which pays the full cost of care.
The study concludes that there is no data to show that remaining differences in cost are due to market power, a more likely cause is higher cost associated with providing higher quality care.