News & Updates

June 23, 2024

When Hospital Prices Go Up, Local Economies Take a Hit – Wall Street Journal, June 23, 2024

Rising healthcare prices have long eroded American wages. They are doing that by eating into jobs.

Companies shed workers in the year after local hospitals raise their prices, new research found. Higher hospital prices pushed up premiums for employees’ health insurance, which businesses help pay for.

The new study, scheduled to be published Monday as a National Bureau of Economic Research working paper, is a comprehensive look at one way companies manage those higher premiums: cutting payrolls.

“Employers that face increases in healthcare spending respond by laying off workers who they can no longer afford to retain,” said Zarek Brot-Goldberg, an economist at the University of Chicago and one of the researchers involved in the study.

Prices go up for several reasons. Consumers will pay more when they get new technology or more in return, for example. That isn’t the case following many hospital mergers, studies find. Quality doesn’t get better, but prices nonetheless rise.

Click here to see the full article on the Wall Street Journal website.