INDIANAPOLIS — The state’s 20 largest hospital systems, including the big four in central Indiana, have been put on notice to rein in their costs or the Indiana legislature may do it for them.
The Rand Corporation conducted a series of studies focused on comparing the cost of healthcare among various states. The latest study, Rand 3.0, compared prices across 49 states. This study found Indiana’s hospital facility fees are the 5th highest in the country.
A Harvard study found Indiana’s hospital inpatient fees are the 5th highest in the country.
That data has captured the attention of the chairman of Hoosiers for Affordable Healthcare, Al Hubbard.
“Our big systems are way out of line,” said Hubbard. “Their profit margins are 4 and 5 times the profit margins nationally. Nationally the profit margins are 3% on sales and our big guys like IU Health, Ascension, Community and Franciscan, they’re making 12%,14% and 16%. And they also have huge accumulations of profits.”
The CEO of Eli Lilly, David Ricks, gave a speech to the Economic Club this past spring, saying in part: Indiana’s healthcare costs are too high, higher than surrounding states.
Hubbard concedes many Hoosiers lead unhealthy lives with high numbers for obesity, smoking and heart disease. But he still believes even with those public health issues, Indiana could and should do better.
“There’s no question, we’re not a healthy state, but that shouldn’t make hospital costs higher. There’s no reason to have higher prices,” said Hubbard. “By the way, in Michigan where the prices are almost half of what they are here, their health statistics are almost exactly the same as ours.”
The head of the Indiana Hospital Association says recent studies singling out Indiana hospital systems as too costly, is dated.
Brian Tabor says there is newer research that paints a different picture.
“If you look at how Indiana ranks from a total cost of care perspective, the premiums businesses pay that incorporate the total health spending, Indiana is really in the middle of the country, right around the national average,” said Tabor.
But the issue has caught the attention of Indiana legislators.
Indiana State Senator Rodric Bray and State Representative Todd Huston wrote a letter to the CEO’s of all the state’s hospital systems this past December. The letter said in part, “The ability of Hoosiers to pay hospital prices that are often more than 50% above the national average, is untenable and unfair.”
“This is a top priority for us,” said State Senator Bray. “We recognize how difficult it can be for families to try and get through any given month with medical bills and the costs they have, and we’ll keep at it until we get some resolution.”
Bray is asking the hospital systems to come up with a plan to get their prices in line with national averages by 2025. IU Health has taken up the challenge so far.
Al Hubbard is hoping the state won’t have to pass legislation forcing hospitals to rein in their fees. But he’s not convinced they are onboard.
“The big disappointment,” said Hubbard, “These are nonprofit hospitals. They have boards, civic boards, civic leaders on their boards. Their purpose is to serve the community.”