The health care cost-shifting debate: could both sides be right?

Private payers and many industry analysts claim that hospital pricing strategy typically shifts health care costs from government payors to private payors. Economists believe, however, that hospitals would have maximized prices with previous market power, preventing any current opportunity to increase prices and shift costs. Economists have more recently claimed that a lack of competition is the reason for any cost shifting that may be occurring. Given issues such as hospital mission and governance, and the responses of hospitals to changing industry conditions, both parties may be correct in their cost-shifting assessment. Furthermore, understanding both viewpoints may be necessary to address adequately the cost-shifting issue and the future financing of health care.