Op-ed: Tackling affordability is a shared responsibility. Here's what hospitals are doing

Health care affordability is front and center in America, from kitchen table discussions to heated debates on Capitol Hill. Americans are feeling the strain of rising costs, forcing difficult choices about whether to fill a prescription, schedule a follow-up visit or delay care altogether. 

Healthcare system costs are driven by several factors, including the growing burden of chronic disease, unsustainable pharmaceutical pricing, insurance benefit design, and complex administrative burdens that add significant expense without really improving care. Every day, hospitals on the front lines of care see the impact these rising costs have on our patients, and we recognize and share the urgency to act. 

These health care cost factors underscore a fundamental truth: no single part of the healthcare system can solve affordability on its own. Real progress will require shared responsibility and coordinated action. Everyone needs to do their part, which is why hospitals are taking action.

Across the country, from large urban settings to small rural communities, America’s hospitals are already changing how care is delivered to make it more affordable, accessible and patient-centered. Hospitals also are advancing tangible, practical solutions that can meaningfully improve affordability for the patient while protecting access and quality by focusing on five core areas.

• First, increasing affordability starts with keeping people healthy. Expanding access to preventive services, primary care and behavioral health, and using tools like telehealth and emerging technologies to reach patients easier and earlier can reduce the need for far more expensive interventions down the line. Everyone knows this—and hospitals and health systems are doing the hard work to address Americans’ health issues before they become more expensive crises. Lowering out-of-pocket costs for patients by reducing co-pays and deductibles could also significantly improve affordability.
• Second, we need to accelerate efforts to transform our care delivery system and reward value. This includes strengthening accountable care models and improving care coordination across providers to help ensure patients receive the right care at the right time in the right setting. We must work together to address inefficiencies in care delivery, such as fragmented coordination, duplicative or low-value services and misaligned payment incentives that reward volume over value. 

• Third, we must tackle the administrative complexity that misdirects care resources and adds billions in unnecessary costs each year. Simplifying and accelerating prior authorization for medicines and procedures, standardizing billing processes, and reducing duplicative, outdated regulations and administrative burdens would free up resources for patient care rather than paperwork.
• Fourth, we must address the rising cost of drugs and devices by increasing competition from generics and biosimilars, advancing value-based payment for high-cost therapies and curbing practices that delay more affordable alternatives.
• Finally, we must continue to embrace innovation. Hospitals are leading innovation in care delivery, treatment and technology to advance patient care and improve health outcomes. This includes expanding hospital-at-home models, remote monitoring, predictive analytics and early detection tools that prevent complications and bring care closer to patients. 

These are not isolated efforts. They are part of a broader transformation underway across the hospital field to deliver more connected, coordinated care that improves outcomes while lowering costs for patients, taxpayers and our overall healthcare delivery system. 

Hospitals are committed to building upon this transformative momentum, while facing serious challenges that impact the affordability of care. In most cases, hospitals do not set prices. Medicare and Medicaid, which pay for over 70% of hospital inpatient days, set payment rates administratively and typically reimburse hospitals well below the cost of care. In 2024, Medicare paid just 83 cents for every dollar hospitals spent caring for patients, resulting in more than $100 billion in underpayments.

Meanwhile, inflation coupled with hospitals’ costs for labor, supplies and medications continues to increase as they care for more patients who are sicker and medically complex. Additionally, hospitals’ costs for delivering care grew about twice as fast as reimbursements for patient care in 2025, meaning hospitals absorbed much of the increase instead of shifting it to patients or payers.  

While hospitals address these challenges, we recognize that we must prioritize solutions that matter most to our patients—and that is how to make care more affordable in this county.

Improving healthcare affordability cannot happen in isolation. Hospitals cannot solve the affordability problem alone. Neither can insurers, drug manufacturers, employers or the government. We all have an individual role and responsibility to help bring these costs down.

The path forward will not be simple, but it is clear: We must work together, stay focused on solutions and keep patients at the center of every decision. Hospitals are ready to partner across the healthcare system to make care more affordable and accessible—because the people and communities we serve are counting on us to get this right.

Rick Pollack is president and CEO of the American Hospital Association.