Should Hospitals Be Treated Like Utilities? Rethinking Healthcare Pricing with David Balinski

On this episode of The EOB Podcast, we sat down with David Balinski for one of the most thought-provoking conversations we’ve had so far.

And honestly, we covered a question that sounds radical at first… until you actually think about it:

What if hospitals were treated like utilities?

Not government-run healthcare.
Not Medicare for All.
Not socialism.

Just structured pricing guardrails for an industry people cannot realistically “shop” the way traditional free markets require.

Because when healthcare pricing feels random, hidden, and impossible to predict… is it really functioning like a free market at all?

That question drove almost the entire episode.

The Current Healthcare System Is Not Working

One thing everyone in this conversation agreed on immediately:
The current healthcare system is broken.

Not slightly inefficient.
Not mildly frustrating.

Broken.

And importantly, this is not just an employer problem or an insurance problem.

Everyone feels it:

• employers
• employees
• providers
• hospitals
• advisers
• TPAs
• stop-loss carriers
• patients

Throughout the episode, we discussed how healthcare has evolved into a system filled with:

• unpredictable pricing
• administrative complexity
• hidden fees
• opaque negotiations
• conflicting incentives
• endless middle layers
• inconsistent outcomes

And meanwhile, Americans continue paying more for healthcare than almost any other developed country while frequently experiencing worse outcomes.

That disconnect is becoming harder and harder to justify.

Why Healthcare Does Not Function Like a True Free Market

One of the biggest themes throughout the conversation was the idea that healthcare is often described as a “free market” — even though it lacks many of the basic characteristics of one.

As David explained, consumers typically cannot:

• compare prices easily
• understand actual costs
• negotiate pricing
• make informed purchasing decisions
• delay emergency care
• meaningfully shop during crises

And that matters.

Because free markets rely on transparency and informed consumer choice.

But in healthcare?
People usually do not know:

• what something costs
• why it costs that amount
• whether someone else paid less
• how networks impact pricing
• who is making pricing decisions
• what incentives exist behind the scenes

That creates a system where prices can vary wildly for the exact same service.

And honestly, most consumers never even realize it.

The “Hospitals as Utilities” Concept

The central idea we explored was whether hospitals should operate more like utilities.

Think about:

• electricity
• water
• gas

Those are essential services people rely on every day.

And because consumers generally cannot choose between dozens of competing utility providers, those industries operate with pricing oversight and guardrails.

David made the argument that hospitals function similarly:

• communities need them
• emergencies eliminate consumer choice
• access matters
• competition is limited
• pricing transparency is weak

So the question becomes:
Why are hospitals treated completely differently?

The proposal was not about controlling medical decisions.
It was about creating structured pricing models that reduce:

• extreme pricing variation
• administrative waste
• hidden negotiations
• arbitrary billing practices

While allowing hospitals to compete on:

• quality
• outcomes
• patient experience
• efficiency
• innovation

The Same Procedure Can Have Wildly Different Prices

One of the clearest examples discussed throughout the episode involved the randomness of hospital pricing.

Right now, two people can:

• go to the same hospital
• receive the same procedure
• have the same doctor

…and still receive dramatically different bills depending on:

• their employer
• their insurance carrier
• their network
• their contract structure

That randomness is one of the strongest arguments for reform.

Because pricing should not feel arbitrary.

As we discussed, most consumers simply assume:
“Surely there’s some logic behind this.”

But often, the pricing differences come down to network negotiations and contracting structures that patients never see.

The Illusion of Healthcare Price Transparency

Another major topic was the illusion of transparency in healthcare.

Technically, hospitals are already required to publish pricing data.

But in practice?
Most consumers still cannot realistically use it.

Even within the industry, understanding pricing can feel nearly impossible.

Throughout the episode, we discussed how:

• prices remain difficult to compare
• systems are overly complicated
• consumers lack usable tools
• healthcare literacy gaps remain enormous
• emergency situations eliminate shopping ability entirely

And honestly, most people are not trying to become healthcare pricing experts.

They just want care.

Networks Create More Complexity Than Most People Realize

One of the most interesting parts of the conversation centered around networks.

Because when you step back and really think about it:
What exactly are networks accomplishing anymore?

We discussed situations where:

• the same hospital charges different prices depending on the carrier
• providers within the same hospital can be out-of-network
• emergency services trigger surprise bills
• pricing varies wildly behind the scenes

At one point, we even asked:
If pricing became standardized and transparent, would networks still need to exist in their current form?

That is obviously a huge question.

But it highlights just how much administrative infrastructure currently exists around negotiating, repricing, and managing healthcare contracts.

Administrative Waste Is Everywhere

One of the strongest themes throughout the episode was how much money gets consumed by administrative complexity instead of patient care.

We discussed:

• repricing vendors
• shared savings fees
• network access fees
• percentage-of-savings arrangements
• contract negotiations
• claims processing layers
• billing disputes
• coding disagreements

And honestly, some of these examples sound absurd when explained out loud.

At one point, we described how healthcare claims can pass through multiple organizations that all “reprice” the same claim — with each entity taking a percentage along the way.

That creates enormous administrative waste.

And importantly, much of that spending does not improve actual patient care.

Employers Are Feeling the Pressure

The conversation also focused heavily on employers and rising healthcare costs.

We discussed examples of:

• 30% renewals
• 50% increases
• even 90%+ projected increases for some groups

And employers are increasingly stuck trying to balance:

• affordability
• employee access
• retention
• plan sustainability
• fiduciary responsibility

Meanwhile, employees are dealing with:

• rising payroll deductions
• higher deductibles
• larger out-of-pocket exposure
• delayed care
• prescription affordability issues

At some point, the system becomes unsustainable.

And many employers feel like they are already there.

Healthcare Costs Are Affecting Everyday Life

One of the most important points throughout the episode was how healthcare costs now impact decisions far beyond healthcare itself.

People are:

• delaying care
• avoiding prescriptions
• skipping appointments
• struggling with deductibles
• putting off preventative treatment
• making difficult financial tradeoffs

We even discussed how rising healthcare costs affect:

• family planning
• retirement savings
• housing stability
• food security
• overall financial wellbeing

That is part of why these conversations matter so much.

Healthcare costs are no longer isolated financial issues.
They impact nearly every aspect of daily life.

Could Healthcare Competition Shift Toward Quality?

One of the more optimistic parts of the conversation focused on what healthcare competition could look like if pricing became more structured.

Instead of competing primarily through:

• network leverage
• hidden pricing
• reimbursement games
• opaque negotiations

…providers could compete more directly on:

• outcomes
• quality
• patient experience
• accessibility
• operational efficiency

And honestly, most consumers probably care far more about:

• “Will I receive great care?”
• “Will I recover safely?”
• “Can I trust this provider?”

…than they do about complicated reimbursement structures they never see anyway.

Direct Primary Care and Preventative Care Came Up Too

Toward the end of the episode, we also discussed direct primary care and preventative care models.

One major issue we talked about:
Many primary care physicians are leaving independent practice because the administrative burden has become overwhelming.

At the same time:

• preventative care often gets delayed
• chronic conditions worsen
• patients end up in expensive hospital settings later

The broader point was this:
Healthcare systems should incentivize keeping people healthy — not simply managing expensive downstream crises.

And many current payment structures do not align with that goal.

Final Thoughts: The Goal Is Not More Complexity

One of the reasons this conversation stood out so much is because it challenged a common assumption:
That healthcare problems require increasingly complicated solutions.

But maybe the opposite is true.

Maybe one of the biggest problems in healthcare is that the system became too complex in the first place.

Too many:

• hidden layers
• pricing games
• opaque contracts
• middle entities
• administrative processes
• conflicting incentives

And maybe introducing clearer guardrails and transparency would actually improve:

• competition
• innovation
• affordability
• access
• outcomes

At minimum, these are conversations worth having.

Because when pricing no longer makes sense… eventually the entire system stops making sense too.

FAQ: Hospitals as Utilities & Healthcare Pricing

What does “hospitals as utilities” mean?

It refers to treating hospital pricing more like regulated utility pricing, where pricing guardrails and transparency exist for essential services people cannot realistically shop for during emergencies.

Would hospitals become government-run?

No. The discussion focused on pricing structure and transparency — not government ownership of hospitals.

Why doesn’t healthcare function like a normal free market?

Consumers often cannot compare prices, negotiate costs, delay care, or make informed purchasing decisions during medical emergencies.

Why are healthcare prices so inconsistent?

Pricing often depends on network contracts, carrier negotiations, reimbursement structures, and opaque agreements that consumers never see.

What are shared savings fees?

Shared savings fees occur when vendors take a percentage of the “savings” they generate by reducing or repricing claims.

Could standardized pricing reduce healthcare costs?

Potentially. Structured pricing could reduce administrative waste, hidden fees, extreme pricing variation, and unnecessary complexity throughout the system.

Listen to the Full Episode

To hear the full conversation with David Balinski and explore more discussions around healthcare pricing, hospital transparency, fiduciary responsibility, employer healthcare strategy, and the future of healthcare reform, visit The EOB Podcast.