AHIP lays blame for rising healthcare costs on hospitals, private equity

In a pair of news releases today, the main trade association for the U.S health insurance industry blamed hospitals and private equity firms for rising healthcare costs.

The trade association, AHIP, asserted that 40% of every premium dollar is used to cover hospital-related costs. The news release traces the source of hospital costs to “decades of consolidation among hospitals” that has shifted the negotiating power in many local markets and to private equity firms owning a growing number of hospitals. According to AHIP, private equity firms now own nearly 500 U.S. hospitals, and approximately a quarter of those hospitals are in rural communities.

The AHIP news release also takes aim at hospital facility fees, which, the news release says, lead to higher prices and great variation in prices for the same service. Citing a 2025 report by the Health Care Cost Institute, the AHIP news release says prices can be 13 times higher for the same service depending on where it was delivered. “For patients, it is often ‘the same visit, higher bill.’ These facility fees and other opaque hospital billing practices mean higher premium costs year after year,” the news release says.

A spokesperson for the American Hospital Association wrote in an email “we don’t have anything to add” when the association was asked for comment.

AHIP issued the pair of news releases, titled “Health Care Costs 101,” the day before the CEOs of major health insurers are scheduled to testify before the House Energy and Commerce Committee’s health subcommittee tomorrow at 9:45 a.m. and then before the Ways and Means Committee at 2:30 p.m. The executives who are scheduled to appear before the health subcommittee are Stephen Hemsley, CEO of UnitedHealth Group; David Joyner, chair and CEO of CVS Health; Gail Boudreaux, president and CEO of Elevance Health; David Cordani, president, CEO and chair of the board of Cigna; and Paul Markovich, president and CEO of Ascendium, the parent company of Blue Shield of California. Ellen Allen, executive director of West Virginians for Affordable Health Care, is also a scheduled witness

The same five executives are scheduled to appear before the Ways and Means committee along with ReShonda Young, owner of T&K Health and Nutrition in Waterloo, Iowa.

Health insurers are facing political pressure from both Democrats and Republicans. Democrats have long been critical of private insurers, especially the publicly traded companies, such as UnitedHealth Group and CVS Health. Many in the party favor a single-payer system of some kind or, at the very least, greatly expanding Medicare. The populist shift of the Republican Party has made some members more adversarial toward some business interests, including health insurers.

President Trump has cast aspersions on health insurers. When he announced his Great Health Plan last week, he said money would go directly to individuals and that “the big insurance companies lose and the people of our country win,” according to quotes from his remarks posted on the White House website.

The AHIP news release today on private equity cites research published in the International Journal of Radiation Oncology • Biology • Physics that showed that 82 private equity firms acquired 423 cancer treatment practices between 2013 and 2022 and that radiation therapy prices increased at the private-equity-backed facilities by 50% and chemotherapy costs by 28%.

The AHIP news release also accuses some private equity firms of gaming the No Surprises Act to get paid at higher out-of-network rates and to win arbitration cases under the independent dispute resolution process that the law set up.