This February, between the season’s final frost and the first signs of spring, we explored new research on healthcare affordability. This month we read about the pricing impacts of vertical consolidation, the primary drivers behind the recent surge in national health spending, and the persistent threat of medical debt for patients following acute injuries.
Strategic Selection And Pricing Power: Optum’s Acquisitions Of Ambulatory Surgery Centers And Physician Practices
Derek T. Lake et al.. Health Affairs. February 2026. Available here.
Researchers from Cornell and Brown Universities analyzed Medicare and commercial claims data from 2013–2021 to evaluate how Optum’s acquisitions of physician practices and ambulatory surgery centers (ASCs) influenced patient referral patterns and facility pricing.
What it Finds:
- Optum preferentially acquired physician practices that already had high rates of ASC use, meaning the acquisitions did not cause a significant shift of patients from hospital outpatient departments to less expensive settings.
- The acquisition of 24 ambulatory surgery centers was associated with an 11 percent price increase for procedures charged to competing commercial health plans.
- This price growth was driven by a combination of broad increases in facility fees and a rise in professional fees that occurred specifically among Optum-employed physicians.
- In markets where Optum owned both the referring physician practice and the surgery center, there was no evidence that vertical integration led to improved cost-savings through “site-of-care” shifts, despite the potential for such incentives.
Why it Matters
This research challenges the narrative that vertical integration leads to a more efficient healthcare system. While acquiring entities often claim that their purchase of physician practices and surgery centers lowers costs by steering patients to cheaper sites of care, this study demonstrates that these entities may instead be cherry-picking already-efficient practices and then using their increased market power to increase prices. The 11 percent price increase for competing insurers suggests that such consolidation can be used as a tool to disadvantage rivals, which ultimately drives up premiums for consumers. Ultimately, the data suggest that moving care to ambulatory settings is not a cure-all for affordability if those settings are owned by dominant corporate entities.
Hospital Spending Accounted for 40% of the Growth in National Health Spending Between 2022 and 2024
Jamie Godwin, Zachary Levinson, and Tricia Neuman. KFF. February 2026. Available here.
KFF researchers analyzed federal National Health Expenditure (NHE) data from 2022 through 2024 to identify and compare the primary drivers of growth across various sectors of national health spending.
What it Finds:
- Hospital care was the primary driver of national health spending growth between 2022 and 2024, accounting for $277 billion (40 percent) of the total $692 billion increase in spending during that period.
- Price increases and a return to pre-pandemic utilization levels for high-intensity services were cited as the leading factors behind the surge in hospital expenditures.
- Total national health spending reached $5.1 trillion in 2024, with an average annual growth rate of 7.3 percent over the two-year period, significantly outstripping the 5.2 percent growth seen in the overall U.S. economy.
- The contribution of hospital spending to total growth far exceeded other major categories, with physician and clinical services accounting for $96 billion (14 percent) and retail prescription drugs accounting for $88 billion (13 percent) of the increase.
- Health insurance administrative costs and profits, along with government public health activities, represented the second-largest share of growth at 15 percent, reflecting a “residual” category of spending that rose as pandemic-era programs wound down and private market dynamics shifted.
Why it Matters:
Despite significant policy focus on drug pricing and insurance company profits, the hospital sector remains the most substantial contributor to rising healthcare costs in the post-pandemic era. The fact that health spending is growing at a faster rate than the overall economy suggests that medical expenses are consuming an ever-larger share of national resources, which can crowd out other public and private priorities. This trend is driven not only by a return to high-intensity care after years of deferred services but also by persistent upward pressure on the prices hospitals charge. For employers and consumers, this shift translates directly into higher commercial insurance premiums and increased out-of-pocket costs.
Changes In Medical Debt And Bankruptcy After Acute Traumatic Injuries, 2019-21
John W. Scott et al.. Health Affairs. February 2026. Available here.
Researchers from the Universities of Washington and Michigan analyzed a statewide trauma registry linked to consumer credit reports from 2019–21 to evaluate the impact of acute traumatic injury hospitalizations on medical debt and bankruptcy filings.
What it Finds:
- At eighteen months post-injury, the proportion of patients with medical debt in collections increased by 5.2 percentage points, representing a 24 percent relative increase compared with the pre-injury baseline.
- The average amount of medical debt in collections per patient rose by $290, which marks a 76 percent relative increase from the levels recorded before the traumatic event.
- Post-injury bankruptcy filings peaked at fifteen months, reaching a rate of 3.2 per 1,000 patients and representing a 6 percent relative increase over the baseline.
- Financial hardship disproportionately affected uninsured, younger, and lower-income individuals, as well as those with private insurance, while patients covered by Medicare and Medicaid experienced minimal changes in their financial status.
Why this Matters:
Even with the Affordable Care Act’s coverage gains, an unanticipated acute medical event can still cause significant and lasting financial instability for American families. The fact that privately insured patients saw meaningful increases in debt and bankruptcy indicates that many commercial plan designs, characterized by high deductibles and cost-sharing, are failing to provide adequate financial protection against traumatic injury. These financial shocks have a long tail, with debt and bankruptcy filings peaking more than a year after the initial injury, suggesting that the economic fallout persists long after the clinical recovery. The study also exposes a stark contrast in protection across insurance types, as those with Medicare and Medicaid were largely shielded from financial risk thanks to their more generous coverage. These findings underscore that for many Americans, particularly the privately insured, a single emergency remains a potential catalyst for long-term collections and credit damage.