Americans want to pay for what they’re getting in return. In 2025, lawmakers in Washington are attempting to apply this idea broadly with fair taxes and the fair use of taxpayer dollars.
Policymakers need to extend this same fairness to healthcare and can do so easily with a simple reform that can open up billions in healthcare savings: mandating the same price for the same treatment.
Current governmental guidelines permit hospitals to charge Medicare patients more for the same service, depending on the location where it is provided. This outdated, outrageous practice drains the wallets of millions of taxpayers and encourages healthcare consolidation.
Patients should expect to pay fair prices for care, not vanity charges for hospitals. Lawmakers need to step in and correct this oversight.
The price differences in care can be staggering. Some hospitals mark up the cost by 50 percent to 120 percent, compared to independent doctor offices. These differences are evident in the prices of life-saving preventive care, such as diabetes screenings and mammograms, and drug-delivery services at a local pharmacy.
Yet, these incredible cost differences are far more insidious than individual price tags. The influx of cash from extra payouts has encouraged hospitals to buy up the competition. Over the last few decades, hospital systems have bought up independent healthcare practices by the dozen. As of 2022, one-third of physicians in the United States work at a hospital or hospital-owned practice. A doctor’s office owned by the nearest hospital could potentially charge a Medicare patient hundreds of dollars more for a treatment they need.
Not only does this make a patient’s life considerably worse, but it also exaggerates the already adverse effects of healthcare consolidation on the economy. Existing mergers between hospitals have already shot the average price of care up by 60 percent or more. Allowing hospitals to charge more for the same service will encourage more acquisitions of smaller practices to drive up profits. Fewer hospitals and doctor’s offices mean less competition, higher costs of care, and lower treatment quality.
Members of Congress have been aware of this disparity for years. It’s especially poignant for lawmakers looking to cut costs during budget reconciliation.
Forcing hospital systems to pay the same amount for the same treatment would result in massive savings to the government. One estimate details up to $157 billion in revenue recouped from this one fix. To put it in perspective, mandating “site-neutral” payments would save 75 times the money compared to the recent HHS workforce reductions.
The savings for patients could be even more impactful. The $157 billion in savings means a significant amount of unrealized funds will be returned to patients who need them, especially those with severe conditions. Cancer patients looking ahead to expensive treatment plans can rest easy knowing they won’t be overcharged by a hospital network looking to pad its bottom line.
Site-neutral payment reforms are the silver bullet that lawmakers are seeking — they’re popular, bipartisan, save taxpayer dollars, and demonstrate a commitment to improving lives. They can help preserve the independence of doctors who want to serve patients rather than the corporate bottom line of hospital administrators.
That bullet could come in handy over the next few weeks. Finalizing and passing a budget is difficult for an increasingly polarized Congress. It will require compromise, and site-neutral reforms are ideas that members of Congress from both parties have been willing to compromise on.
Take senators Maggie Hassan, D-N.H., and Bill Cassidy, R-La. Both come from opposite parts of the country and opposite parties, and they have clashed on many healthcare issues. Yet, one of their key priorities last congressional session was unveiling a policy framework for site-neutral payments that’s ready to be implemented into legislation. The framework and countless other bills demonstrate that Congress is prepared for bipartisan cooperation on healthcare policy.
If nothing else, including site-neutral payment reforms in this year’s reconciliation bill will give lawmakers some breathing room as they prepare to cut costs. That breathing room comes with the added benefit of helping patients. That’s always been — and always will be — the goal.