Joe Peluso, an administrator at Greensburg, Pa.-based Aestique Surgery Center, joined Becker’s to discuss how the U.S. healthcare system is entering a period of major change, but warned rising costs are outpacing improvements in coverage and innovation.
He outlined a series of policy and payment reforms he believes are necessary to curb spending while protecting access and quality.
Editor’s note: This interview was lightly edited for clarity and length.
Joe Peluso: The healthcare industry is entering an era of profound change in 2026, while making great strides in reducing the number of people without health insurance over the past 20 years. In addition, there have been tremendous improvements and innovation in healthcare delivery compared to the standard of care from decades ago. In 2024, the Census Bureau reported that Americans reached a historic high of 92% that have insurance coverage. However, healthcare costs have continued to escalate at a faster rate than inflation, impacting accessibility and affordability for families and businesses. According to the Kaiser Family Foundation Health Benefits Survey, the employers’ share for a family health insurance policy average premium in 2024 was $22,221, nearly triple what it was in 2001; and the average employee contribution now accounts for 9% of the median household income. The U.S. pays more for healthcare than any other industrialized country, with healthcare spending at approximately $10,000 per capita. Americans have cut back or delayed needed care to pay for other household expenses, which could lead to more negative health outcomes as they age. However, [at the same time] prices for healthcare services have increased.The Health Care Cost Institute identified healthcare prices increased from 2020 to 2024 at roughly double the rate of general inflation, due to higher healthcare spending.
These rising healthcare costs are not sustainable, since the burden is felt by patients and businesses every day through higher premiums and out-of-pocket costs. Americans are concerned about being able to pay for healthcare services and the viability of Medicare and Medicaid in the future. Solutions must address the misaligned incentives that are fueling cost growth. The rising costs are driven by inflationary pressures, evolving patient expectations, technological and medical advancements, shifting payer landscapes, stagnant reimbursements, increasing costs of medical supplies and pharmaceuticals, and updates to CMS regulations and state policies, all impacting the financial sustainability and operational efficiencies. Policymakers must take action … to address some of the root causes of rising healthcare costs:
1. Ensure patients receive high-quality and safe care with quality outcomes delivered at the right place, at the right time, at the right price by CMS phasing out the inpatient-only list and implement a site-neutral payment policy to include higher complexity and acuity cases that can be safely performed at ASCs, which are reimbursed an average of 46% less than hospital outpatient departments. Payments should be increased for ASCs at a reasonable rate and applicable for all outpatient surgeries regardless of site performed.
2. As more complex surgical cases … can be safely performed in ASCs, payers should permit and reimburse ASCs for extended stays for procedures in which the expected operating and recovery times do not exceed 24 hours following admission for patients that require assistance with pain management, nausea or other post-surgical symptoms whereby the patient does not require inpatient hospitalization.
3. Enhance patient access to lower cost prescription drugs [through] the federal government negotiating lower drug prices with pharmaceutical companies [and] addressing the length of a drug’s exclusivity period and manufacturers’ [practice of] gaming of pricing for top-selling drugs and blocking generics and biosimilars from entering the market. In addition, the FDA [should provide] a timely approval process for new drugs.
4. The 340B Drug Pricing Program is over 30 years old and should continue to be supported for eligible hospitals that provide care for vulnerable communities to manage prescription drug costs. [The] 340B [program] requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to healthcare organizations such as critical access hospitals, sole community hospitals and rural referral centers that provide services to low-income and indigent community populations. Unfortunately, some healthcare systems that have merged or acquired eligible community hospitals unilaterally utilize the 340B program as an upfront discount for all drugs utilized within their health system population. The integrity of the 340B program eligibility requirements should be scrutinized by HRSA through audited records for hospitals to comply with the program rules and regulations.
5. Disenfranchise integrated healthcare delivery networks/systems over a three-year period that are leveraging their scale to monopolize and eliminate free and fair competition in the marketplace, representing a conflict of interest by being both a payer (insurer) and provider (hospital system). [Integrated delivery network] health plans control the prices of consolidated health systems by eliminating site-neutral community healthcare competition, resulting in higher costs and the closure of community and rural hospitals. IDNs need to decide over a three-year period to either be a payer or provider but can’t be both.
6. Eliminate healthcare noncompete agreements that will encourage more physicians to develop independent physician practices to provide patient-centric care. Seventy percent of physician practices are currently owned by hospitals and health systems that bill hospital outpatient rates for the same services billed at two to three times higher rates than the rate billed by an independent physician office, which also often results in less accessibility and decreased quality of care by spending less time in direct patient interaction.
7. Remove barriers to the appropriate use of telehealth services that will provide better patient access to underserved areas and medical specialists.
8. Address increased regulations that limit or restrict competition and cost-containment tools such as barriers to interstate insurance, network management designs that restrict providers, and benefit designs that restrict any willing provider.
9. Healthcare policy should provide reimbursement for pursuing community-based health and wellness initiatives coordinated across a continuum of care versus only episodic care.
The aforementioned solutions are all interconnected and have the ability to change, shape, influence and improve the welfare of patients and the healthcare industry by significantly reducing healthcare costs for patients, employers and taxpayers without compromising the delivery and access to high-quality healthcare services in communities. We need to focus on two main issues: making it easier for providers to deliver accessible quality care to patients and making it easier for patients to access and receive quality care.
