Medical inflation is outpacing other U.S. goods and services

by Mark Zander, Samaritan Ministries CEO  ·  Jun 21, 2022

First in a series.

Hello, fellow Samaritan Ministries members,

Grace and peace to you from God our Father and our Lord Jesus Christ. In the midst of societal strife, financial pressures, and other personal concerns, may the Lord be near to you. Through this recent time of Share-increase votes and the transition of many Samaritan™ Given™ members over to our Samaritan™ Classic and Samaritan™ Basic programs, I have been encouraged by standing with our staff in worship and daily prayer for all of you. The joy of the Lord is our strength through all seasons.

This article is the first of several that have been on my heart to write to you regarding the recent Share increases, rising medical costs, and what we all can do about it.

I recognize that the recent Share increase has been difficult for many of you. You may already live on a tight budget and are now experiencing rising inflation on the cost of your everyday goods, services, and now Samaritan Shares. Deciding to ask our members to vote on a Share increase and then needing to propose the vote again because of proration was very difficult for ministry leadership. Please know we would not have pursued this path unless it was necessary.

Rising costs: Why were the increases necessary? The quick, simple answer is rising costs. We all know prices are rising everywhere. We feel it at the gas pump. At the supermarket. With our rent and utilities. It seems no area of life is unaffected by economic challenges.

Stating that medical costs are increasing seems obvious and potentially unnecessary. However, the extent to which medical costs are increasing is not as apparent as it is with the rising gas and food prices we see every week. Few people see medical bills as frequently as they do gas or grocery bills, so it’s harder to be aware of just how much additional cost is being passed along to patients.

Here’s the big news: Medical inflation, particularly with hospital services, is outpacing most other U.S. goods and services.

A chart from the American Enterprise Institute illustrates how health care costs have grown at out-of-control rates over the past 20 years, even before the developments of 2022. Your housing, food, and beverage costs have increased dramatically, right? Hospital services have risen faster. What about your increased childcare costs? Hospital costs have risen faster. Or, we all know how much college costs have gone up, right? Even still, hospital services have risen faster.

According to the Bureau of Labor Statistics, from January 2000 to December 2021—again, even prior to the most recent inflation in 2022!—hospital services have outpaced all the other U.S. consumer goods and services listed in the chart.

Many of you have expressed your frustration with the broken health care system, rising medical costs, and rising Share amounts. We share your frustrations. Medical cost containment is one of the major strategic challenges facing the ministry and the health care industry as we look to the foreseeable future.

To add to this challenge, in May hospital systems were projecting an additional 15 percent increase in costs this year! On May 9, the Wall Street Journal reported that hospitals were seeking to raise prices by up to 15 percent to compensate for rising nurses salaries, overtime, and bonuses. Those costs are passed on to insurers … and cash-pay patients.

Another 15 percent in costs passed on to you and me. Ouch.

What’s it from? Maybe hospital systems are simply raking in profits at the average patient’s expense? It’s not quite that simple. Two major hospital systems reported higher revenue in the first quarter of 2022 but posted losses due to rising expenses across all categories, including supplies and staffing. One of those hospital systems posted an almost $700 million operating loss, with the other reporting a $100 million first-quarter loss. Staffing challenges, including increased use of contracted labor and overtime, are particularly acute for many hospital systems.

This economic challenge is only getting more difficult, and we want to do everything we can to support one another and maintain affordable monthly Shares amid rising costs.

Many of you have expressed your frustration with the broken health care system, rising medical costs, and rising Share amounts. We share your frustrations. Medical cost containment is one of the major strategic challenges facing the ministry and the health care industry as we look to the foreseeable future.

What’s coming: In this series of articles, I am going to start bringing you into the many strategic cost-containment conversations that ministry staff and leaders have every day. In this first article, I wanted to briefly lay out the challenge we’re facing with medical cost inflation and set it in the context of other rising costs we may see more frequently.

In part two, we will focus on the work done by our Provider Relations team to reduce skyrocketing costs.

In part three, we’ll show how you can help. Our hope is by sharing more with you in this challenging area, it will encourage fact-based conversations among members and generate even more new ideas we can consider as we pursue long-term medical savings.

Through these articles, one thing I hope we can all see demonstrated is there is no “one-size-fits-all” solution to this cost-containment challenge. The Lord has blessed us with almost 300,000 members, each within unique family situations, health care practices, and medical needs. A solution that works well for one family may not work at all for another family. That is why it is imperative we listen to each other through these conversations. Several different solutions are necessary to achieve our goals for a majority of members in a ministry this size.

Thankful! To close, I am so thankful for each of you, my fellow brothers and sisters in Christ. Not only do we have the privilege to be sons and daughters of the King, but we are family—a family of believers that comes together each month to fulfill the call of Jesus to share one another’s burdens while honoring our Father throughout the process.

My prayers remain centered on God’s continued provision for all members and for the ministry, the unity of members and staff as we navigate difficult seasons together, and for God’s wisdom and guidance as we focus on glorifying Him by loving, caring for, and serving the Body of Christ.

For The Kingdom!

Mark Zander