Brace yourselves: Hospital system price increases are coming
HCA Healthcare is expected to ask insurers and employers for higher prices after seeing $500 million in higher-than-expected labor costs.
Insurance companies and some hospitals are in a battle of rising costs. A Wall Street Journal report says that some hospitals are dealing with rising nurse salaries and are looking to raise prices up to 15%. Two of those hospital chains looking to increase prices are HCA Healthcare Inc. (HCA) and Universal Health Services Inc.
The bottom line for employers and workers is higher premiums.
The report says that typical price increases range from 4% to 6% with the average being about 3% in more recent times. Also, as of March, average yearly base pay for hospital nurses had reached $86,674, up 9% from $79,172 in June 2021, when the Delta variant took hold in the U.S., according to Premier Inc., a health care consulting, contracting and data-analytics company, which analyzed salaries of about 116,000 nurses.
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HCA is expected to ask insurers and employers for higher prices to start next year after seeing $500 million in higher-than-expected labor costs this year, the Journal reported after CEO Samuel Hazen’s recent earnings call.
HCA said its wage inflation is higher than at any point in at least the past five years and defended its pricing. “We believe our pricing is competitive in the markets we serve, and transparency helps demonstrate that,” a company spokesman said.
Some negotiations with nurses are not opening until 2024 which will delay increases on employers, but according to the report, some insurers say certain hospitals will ask to reopen negotiations earlier.
Cheryl DeMars, CEO of the Alliance, a group of employers that provide insurance to 105,000 people in Wisconsin, Illinois and Iowa, said she has rejected hospitals’ requests this year for prices to recoup labor costs, according to the report.
“It looks to us like we’re overpaying to begin with,” she said. “We’re not inclined to just roll with requests for higher prices because of current inflationary pressure.”
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