Today the House Energy & Commerce Committee held a hearing examining the drivers of rising health care costs in the United States. As policymakers consider solutions to improve affordability and access, it is critical to address the growing role that hospital systems and misaligned federal policies play in driving up costs for patients and employers.

Evidence increasingly shows that current incentives, particularly within the 340B Drug Pricing Program, are contributing to provider consolidation and higher health care spending. The program’s structure encourages hospitals to acquire independent physician practices, shifting care away from lower-cost community settings into more expensive hospital outpatient departments. Patients ultimately bear the burden, often paying significantly more for the same treatments without improved outcomes.

At the same time, the 340B program is failing to meet its intended mission of supporting vulnerable and underserved communities. A growing body of research indicates that program expansion has not consistently improved access to care or health outcomes for low-income patients. Instead, many participating entities and contract pharmacies are increasingly concentrated in higher-income and less diverse areas – raising serious concerns about whether resources are being directed where they are needed most.

Further, the financial benefits generated through 340B and nonprofit tax-exempt status are not consistently translating into meaningful community investment. Many hospitals receiving substantial federal subsidies provide relatively low levels of charity care, and in some cases, engage in aggressive billing and collection practices that place additional strain on patients. These trends call into question whether existing policies are effectively aligned with their stated goals of supporting access and affordability.

Hospital consolidation also continues to reduce competition in local markets, leading to higher prices without corresponding improvements in quality or patient outcomes. This dynamic underscores the need for greater oversight and accountability across the provider landscape.

CIFE encourages Congress to take a comprehensive approach to hospital reform that includes:

  • Strengthening oversight and transparency in the 340B program to ensure savings are directed toward patients in need
  • Advancing site-neutral payment reforms to eliminate incentives that drive care into higher-cost settings
  • Enhancing hospital price transparency so patients and employers can make informed decisions
  • Addressing the impact of consolidation to promote competition and protect consumers

Real reform must prioritize patients by ensuring federal programs and policies deliver measurable value in the form of lower costs, improved access, and better outcomes. CIFE stands ready to work with Congress to advance solutions that restore accountability and foster a more competitive, patient-centered health care system.