Fact check: What is the research done on price gouging in medical care?

Executive Summary

Research on price gouging in medical care finds substantial hospital markups and rising emergency-care prices, while policy responses like the No Surprises Act have reduced some balance-billing but remain contested by providers and insurers. Studies from 2019 through 2025 document both the scale of out-of-network and markup problems and active debate over whether current regulatory fixes fully protect patients or inadvertently raise costs ^{[1] [2] [3] [4]}.

1. Hospital markups expose patients, taxpayers, and governments to large charges

Recent empirical work shows hospital price markups far above underlying costs, with a 2025 study reporting a median hospital markup factor of 3.0 and the top 50 hospitals marking up costs by a median factor of 13, producing major financial implications for patients, private insurers, and public payers ^[1]. These markup figures mean that billed prices often bear little relationship to resource use or standard reimbursement rates, amplifying out-of-pocket liabilities for uninsured and underinsured patients and shifting costs into higher premiums and government spending. The magnitude reported in 2025 frames price gouging not as isolated incidents but as systematic pricing behavior in segments of hospital markets, and it provides a quantitative baseline for policy makers weighing price transparency, rate-setting, or antitrust responses ^[1]. This research reframes 'surprise bills' as part of a broader markup problem.

2. Out-of-network and surprise emergency billing remain a persistent consumer harm

Studies dating back to 2019 document widespread out-of-network billing in emergency care, with notable heterogeneity across hospitals: most have low prevalence but a meaningful minority submit out-of-network charges at very high rates, exposing patients to large unexpected bills ^[2]. Emergency care pricing trends also show substantial increases in average prices for ER Evaluation and Management visits, with a 73% rise from 2012 to 2021 driven by price increases and more use of high-severity coding ^[3]. These findings indicate that even where surprise billing rates fall, underlying price escalation and coding practices can still create financial risk for patients and drive up system-wide spending. Empirical patterns therefore link billing network status and coding intensity to affordability pressures.

3. The No Surprises Act helped but faces criticism about arbitration and cost effects

The No Surprises Act (NSA) instituted federal protections against balance billing and created an independent dispute resolution (IDR) process; regulators and stakeholders report it has curtailed many forms of surprise billing ^[5]. Yet scholars and commentators argue the arbitration mechanism may favor certain providers and drive higher overall costs because of incentives, burdens of arbitration, and selection effects, prompting calls for regulatory tweaks or alternative reimbursement benchmarks ^[4]. Some analyses suggest that arbitration outcomes have tended to skew toward higher billed amounts relative to insurer offers, raising concerns about long-term premium impacts. The policy reduces immediate patient exposure but remains contested over whether it inadvertently preserves elevated provider bargaining power.

4. Legal and technical levers—ACA reasonable-allowed amounts and rate-setting debates—offer alternatives

Policy scholars propose using statutory tools such as the ACA’s “reasonable allowed amount” or explicit payment standards for noncontracted emergency services as paths to constrain excessive charges and reduce disputes ^[6]. These approaches shift attention from case-by-case arbitration to formulaic reimbursement that ties payment to network rates or median in-network amounts, aiming to reduce complexity and administrative cost. Opponents—often provider groups—argue fixed benchmarks may underpay services in high-cost markets or disincentivize provider participation, reflecting an underlying agon between cost containment and provider revenue protection. Empirical evidence on markups and ER price trends strengthens arguments for clearer, administrable standards rather than sole reliance on ad hoc arbitration ^{[1] [3] [6]}. The policy tradeoff centers on predictability versus adequate provider compensation.

5. Big-picture synthesis: diverse evidence, distinct agendas, and clear policy implications

Collectively, the literature portrays a healthcare pricing system with systematic markups, rising emergency prices, and residual surprise-billing risk despite statutory reforms ^{[1] [3] [2] [5]}. Stakeholders diverge: consumer advocates and some regulators stress stronger benchmarks and transparency to curb gouging, while many providers emphasize arbitration and higher payments to preserve access and margin. Researchers link markup magnitudes to broader fiscal impacts on insurers and taxpayers, implying that solutions must address both patient protection and market-wide cost drivers ^[1]. For policy makers, the evidence supports pursuing measurable benchmarks, improving price transparency, monitoring arbitration outcomes, and considering market-level remedies to reduce the structural incentives that produce extreme markups and unpredictable patient liabilities ^{[6] [4] [5]}.