As a licensed practitioner of family medicine who is also the majority owner of a small medical practice, I feel a responsibility to provide top-quality care for my patients as well as comprehensive health insurance coverage for my employees. The problem is, the high cost of health insurance and some of the solutions intended to lower insurance costs have made it increasingly difficult to do both.

My situation is particularly challenging because my small business operates under different constraints than companies in almost any other industry. Of course, we could raise our prices in response to rising costs. But increasing our prices doesn’t necessarily have an impact on our balance sheet because we can only earn for any given service as much as an insurance company chooses to reimburse us. As a result, when our operating expenses grow, we have three choices: accept lower profits, see more patients, or cut costs.

None of these options offer a simple solution or a perfect fix. We have a waiting list for patients, but we would need to increase our provider headcount to accommodate more. We can accept lower profits, but we also feel strongly about the importance of providing our employees with annual raises and offering competitive wages to attract new talent. We could cut our costs, but that would likely include scaling back benefits—like health insurance—for our 16 employees.

Since my small business can’t effectively address the impact that rising health insurance costs are having on our employees and our bottom line, we need help. In order to make health insurance more affordable for small businesses and employers nationwide, policymakers need to rein in skyrocketing premiums, reduce or eliminate facility fees, and improve hospital price transparency regulations.

With access to just one private insurance carrier in our corner of Colorado, our small business has limited options when it comes to providing health benefits. And in recent years, the cost of health insurance has increased drastically for our practice. As recently as 2019, we spent just over $50,000 for a combination of premiums, HSA contributions, and supplemental insurance for our staff. By 2023, our costs ballooned to just over $86,000—a 72 percent increase. We understand that the cost of doing business is going to rise every year, but this rate of growth isn’t sustainable for us. Eventually, we’ll have to stop paying the kind of salaries that help us attract and retain talent, or we’ll have to drop the sort of benefits that most employees have come to expect. Either way, our practice’s ability to provide the best care would suffer.

Of course, there’s no single culprit behind rising health insurance costs, but facility fees are one factor impacting costs across America’s entire health care system. As an independent practice, we aren’t permitted to charge facility fees, but it is nonetheless very difficult to perform some types of critical care without our patients incurring these fees anyway. For example, I perform colonoscopies regularly as part of routine cancer screening. These tests save lives. I perform these procedures at the nearest hospital, in part because we’re in a rural area with limited alternatives, and in part because there’s no way that we could afford the necessary equipment and pay the required staff just by collecting professional fees.

What does this mean for patients? When I perform a colonoscopy at a hospital, Medicare will probably reimburse anywhere between $300–$500 for my work. But when a patient asks the hospital, “What do I owe?” they’re typically quoted somewhere in the $3,000–$4,000 range before insurance steps in. This isn’t’ entirely avoidable: in fairness, that’s how the hospital pays for the equipment that I use, the nurses who are there, the anesthesia provider, etc.

Until about 15 years ago, however, the landscape was different. Physicians in our community and elsewhere performed endoscopy in an outpatient setting. It saved the patients money. Providers used the same type of equipment as hospitals use now. The quality was the same, and physicians were also able to charge fees that were more than what I can get today but less than a modern hospital facility fee. In all likelihood, this practice ended because it was abused. The payers, including Medicare and private insurance, decided that they no longer wanted to reimburse for outpatient endoscopy as they once did. The result is these procedures have been moved to either surgery centers or hospitals, where the facilities can charge huge amounts.

One solution to facility fees is simply to cap them. Here in Colorado, lawmakers have proposed exactly that, on the basis that hospital facility fees often come as a surprise to patients and because facility bills are becoming more prevalent due in part to the merging and consolidation of hospital facilities nationwide. Although a fee cap is not a complete fix for high health care costs, it would help.

Another way to help lower health care expenses is through greater price transparency—if it’s done in a way that doesn’t interrupt patient care. Every month, about two of my patients cancel or scale back their scheduled endoscopy procedures not because they got cold feet but because they received a very high estimated bill from their insurance provider. This is despite the fact that under the Affordable Care Act, colonoscopies intended primarily to screen for colon cancer are supposed to be covered at no out-of-pocket cost for patients. So as long as the procedure is coded correctly—that screening is the main reason rather than diagnostics—it’s going to be covered. Because hospitals here in Colorado are so afraid of getting sideways with the state’s surprise billing act, they will give patients the highest possible bill amount. This ends up scaring people away.

Fortunately, Colorado recently rolled out a new tool that allows patients to compare prices for procedures. My hope is that this will eliminate some of the confusion caused by high estimates. If it works, let’s hope other states adopt something similar. And of course, a patient is always free to contact their provider to discuss billing ahead of elective procedures.

For many small businesses, however, time is running out. A 2024 poll from Small Business Majority revealed that employers that experienced increased health care costs are responding by increasing employee contributions to health plans (51 percent), moving to an insurance plan offering more limited coverage (47 percent), and cutting other employee benefits (29 percent). Notably, nearly one-quarter of small businesses said they dropped health coverage altogether. They’ve also had to raise prices on their goods and services (21 percent) and eliminate or reduce wage increases (4 percent).

Regardless of which levers policymakers ultimately pull to bring down costs, they need to act with an eye toward the fact that for all the cost increases we’ve seen across our health care system, there’s no evidence that we’re massively improving our system or that people’s health is improving. I don’t see that we are making people happier with their physicians and health care providers, or that they’re happier with the care they’re receiving. At some point, we have to show that all this money is actually improving the health of our communities. If we can’t make that case, then there’s no excuse not to change our system—not just for my practice or for small businesses generally, but for every American.

Tony Gerk is a family physician.