If you’re finding it harder to afford daily necessities and your credit card bills keep creeping up each month, you’ve got plenty of company. Whether you’re looking to buy a new house or just some groceries at the local market, inflation has dramatically increased the price you’ll pay.

Adjusting to these price hikes is a relatively new – and frustrating – experience for most Americans, but when it comes to healthcare, paying more and more each year is basically the norm at this point. For families trying to manage a household budget, higher healthcare costs can mean difficult tradeoffs between paying for care and paying for other necessities.

The primary reason healthcare is so expensive today is because healthcare providers and pharmaceutical companies have been charging higher and higher prices for decades, as described in this Get the Facts article . One consequence is that more Americans struggle to afford the care they need. The West Health-Gallup Affordability Index released in June 2026 found that fewer than half of Americans report they can consistently afford healthcare, marking a five-year low.

Numerous factors have contributed to driving up healthcare costs, and most of those factors are complex and difficult to understand. In fact, that lack of understanding has played a key role in enabling this pattern of spiraling care costs to continue for so many years.

In this article, we’ll shed some light on this complicated topic by taking a closer look at a few of the factors that have made care less affordable.

For one, it’s difficult to figure out what hospitals and doctors charge for care. This makes it possible for providers to charge exorbitantly high rates without facing the backlash or lost business that most service providers would experience.

Let’s say you’ve been buying shoes from the same store for years and have grown accustomed to paying about $75 a pair. But on your next visit to the store, the price for the exact same pair of shoes you bought just a year before had suddenly jumped to $300. Naturally, you’d find the price hike unfair and might complain to the store manager before heading to a different shoe store with fair and competitive prices.

In healthcare, the shopping experience for patients has historically lacked that type of transparency. And for many people, that’s one of the most frustrating things about healthcare – that they don’t know what care will cost until after it happens.

  • People show up for doctor appointments or for a procedure at a local hospital without knowing what the doctor or hospital will charge.
  • Most patients with private insurance pay only a portion of the cost of their care, typically in the form of a copay or co-insurance, so they’re protected from having to cover the full cost.
  • This enables providers to charge increasingly higher rates for their services without having to fear their patients will become frustrated and seek care elsewhere.
  • Until just a few years ago, the rates providers negotiated with insurance companies were considered confidential. This meant self-insured employers, meaning employers that cover the cost of their employees’ healthcare out of their own funds, had no way of knowing what providers in their area were charging or when their rates were going up.

Providers have leveraged these dynamics to charge higher and higher rates, a trend that has persisted for decades. Consider that since 2000, hospital prices have increased by more than 250%, which is twice the overall rate for medical care and triple the rate of inflation. These price increases eventually lead to higher premiums and out-of-pocket costs for consumers.

How does a lack of transparency around healthcare costs affect the consumer?

The short answer is it makes it difficult for consumers to choose where to receive care based not only on what’s right for their health but also on what’s best for their wallet.

And that’s because some hospitals have leveraged the lack of transparency in healthcare costs to charge substantially higher prices than other hospitals. The result is wide cost discrepancies between providers, a problem that still hasn’t been solved despite a federal law designed to address it.

The law went into effect in 2021 and requires hospitals to provide clear pricing information online, including a comprehensive machine-readable file for all items and services and a consumer-friendly display of prices for “shoppable services,” meaning elective procedures like knee replacements. But according to PatientRightsAdvocate.org, a nonprofit that’s conducted biannual reviews of hospitals’ price transparency files, only 36% of hospitals were fully compliant with the law as of July 2025. And even when hospitals have posted their pricing online, the volume of data is usually overwhelming for consumers, and understandably so.

As a result, many Americans continue to struggle to understand the cost implications of their decisions on where to receive care. And that has enabled some hospitals, particularly those that have strong brand recognition and are considered the premier hospital in their market, to continue to charge vastly higher rates than their peer hospitals for the same services.

How much do healthcare costs vary across healthcare providers?

Trilliant Health, a healthcare analytics company, recently used data from two major health insurers to analyze inpatient and outpatient rates charged by nearly 2,700 hospitals and 3,500 surgery centers.

  • They found that prices can vary as much as ninefold for the same operation or procedure.
  • Even hospitals within the same state charge vastly different rates – as much as three times higher.
  • As just one example, the cost of a total knee replacement can be as low as $12,870 or as high as $101,527, depending on the hospital. 1

Do hospitals that charge higher rates provide higher-quality care?

Most people don’t dig into the data to spot these price discrepancies, which means far too many of them wind up choosing the most expensive hospital for their healthcare needs. When people unknowingly receive care at higher-priced facilities, it leads to bigger medical bills and greater financial strain for consumers as well as employers that opt to self-insure. And those higher costs do not necessarily mean higher-quality care. In fact, Trilliant Health analyzed 10 hospitals listed on multiple best hospital lists and found no connection between higher prices and improved healthcare quality.

How do acquisitions of provider groups affect healthcare costs?

Hospitals have acquired a significant number of provider groups, which has led to higher costs for consumers. The number of independent physicians in the U.S. has been dwindling every year for well over a decade, with many now working for a hospital system. According to a study published by the National Bureau of Economic Research (NBER), the share of doctors working in hospital-owned practices has roughly doubled over the last two decades. 2

While hospitals often tout these acquisitions as opportunities to improve coordination of care and health outcomes, research has found the most predictable outcome is higher costs.

  • The NBER study found that integration between hospitals and physicians led to “significant and sudden” price hikes but without any change in the quality of care.
  • To illustrate the impact, consider the most common reason for a hospital admission for privately insured patients – having a baby. Within two years of being acquired by a hospital, physician prices for childbirth increased by just over 15%.
  • According to the researchers, one of the reasons for the higher prices was a loss of competition in the market.

What’s being done to help curb rising healthcare costs?

As frustrating as it is to struggle to afford care because of skyrocketing healthcare costs, there is reason for hope. The affordability crisis in healthcare has intensified to the point that it’s now widely recognized, including by elected officials, and efforts are underway to try to contain rising prices. For example, several states have passed laws that cap hospital price hikes each year. And the Trump administration has signaled that it intends to crack down on hospitals that haven’t fully complied with price transparency laws.

UnitedHealthcare is helping address these challenges as well by giving members clearer cost information before they receive care, making it easier to compare options and choose care that meets both their health and budget needs.

  • For example, UnitedHealthcare’s provider search tool called Smart Choice enables members enrolled in eligible employer-sponsored plans to compare the average total costs of their care for various providers in their plan’s network. This helps members identify lower-cost care options and make more informed decisions about where to receive care.
  • UnitedHealthcare members who enroll in the Surest health plan can use the plan’s app to see upfront pricing for procedures and services, and they pay lower copays when they choose providers that have a demonstrated track record of delivering efficient, cost-effective care.

Check out the following articles to learn more about how UnitedHealthcare is helping people save money by making it easier to comparison shop for healthcare:

  • Medical cost estimates in 4 steps
  • Navigating an unexpected procedure with Surest’s cost transparency
  • Surest helps support those with complex needs

1 A $101,000 knee replacement? Why hospital charges vary so much.

2 Hospitals are buying more doctor’s offices. That’s tied to higher costs, study finds | Healthcare Dive