A patient room at Massachusetts General Hospital. Photo: David L. Ryan/The Boston Globe via Getty Images

Our recent analysis of hospital finances showed many of the largest tax-exempt hospitals are faring quite well even as they care for more people with government insurance.

The big picture: Hospitals have long argued they have to charge patients with commercial insurance more to make up for the lower payments they receive from Medicare and Medicaid, a theory known as "cost-shifting." But evidence suggests that theory doesn't hold any weight.

What they're saying: Tom Nickels, a top lobbyist for the American Hospital Association, submitted a statement in response to our analysis that said hospitals "need positive margins to keep pace with increasing health care needs," and their investment returns partially offset "underpayments from Medicare and Medicaid."

Yes, but: The AHA did not address issues of hospital consolidation and negotiating leverage, which studies show lead to higher commercial hospital prices regardless of what Medicare and Medicaid pay.

  • "Commercial prices are purely based on elasticity of demand in the local market," said Glenn Melnick, a health economist at the University of Southern California who reviewed the analysis. "It's not driven by what they're being paid by the other guys."

The bottom line: "If you've got market power, you can get above-market increases forever," Melnick said.

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Updated 2 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 a.m. ET: 10,902,347 — Total deaths: 521,940 — Total recoveries — 5,777,662Map.
  2. U.S.: Total confirmed cases as of 10 a.m. ET: 2,739,879 — Total deaths: 128,740 — Total recoveries: 781,970 — Total tested: 33,462,181Map.
  3. Public health: The states where face coverings are mandatory Regeneron stops trial after drug fails to help patientsWhat we know about the coronavirus immune response — Fauci says it has been a "very disturbing week" for the spread of the coronavirus in the U.S.
  4. Business: Top business leaders urge the White House to develop mandatory mask guidelines.
  5. Politics: Herman Cain hospitalized for COVID-19 after attending Trump Tulsa rally — Biden downplays jobs number, rebukes Trump for ignoring health crisis.
  6. Economy: The economy may recover just quickly enough to kill political interest in more stimulus.
  7. States: Texas mandates face masks in public spaces Florida reports more than 10,000 new coronavirus cases, and its most-infected county issues curfew.

Markets swell as the economy shrinks

Illustration: Eniola Odetunde/Axios

The economy is sputtering, but the markets are thriving — a highly unusual event that shows how the coronavirus has thrown all bets off.

Why it matters: The disconnect adds to the wealth gap. The richest 10% of households — who own 84% of stocks — are getting richer, while millions of out-of-work Americans cross their fingers that pandemic unemployment benefits will be extended.

13 hours ago - Health

Fauci: Coronavirus surges mark a "very disturbing week" in the U.S.

Fauci testifies to the Senate Health, Education, Labor and Pensions Committee on June 30. Photo: Al Drago/AFP via Getty Images

NIAID director Anthony Fauci told medical journal JAMA on Thursday that it has been a "very disturbing week" for the spread of the novel coronavirus in the U.S.

What's happening: The number of coronavirus cases increased in the vast majority of states over the last week, and decreased in only two states plus the District of Columbia, Axios' Caitlin Owens reports.