Why Healthcare Can Be Expensive

Healthcare costs are a real concern for families nationwide–including across Tennessee. Hospitals understand that concern because they face financial challenges of their own.

Many people assume hospitals set the price of healthcare, but the reality is far more complicated. Hospital finances are shaped by rising operating costs, insurance reimbursement, and Medicare and Medicaid payment rates. Hospitals also treat patients regardless of their ability to pay. That, plus underpayment from Medicare and Medicaid creates a financial gap that hospitals must absorb. Hospitals don’t control many of those factors, but they navigate them every day while continuing to care for their communities.

Because of these unique challenges, federal programs were created to help fill critical gaps so hospitals can continue to serve the patients who depend on them.

And despite these challenges, hospitals continue to provide emergency services, care for uninsured patients, invest in new technology, and maintain the staff, services, and resources healthy communities rely on.

Watch our short explainer below to see why hospitals are different from most other businesses and why the policies supporting them are an important part of understanding your own healthcare costs.