State lawmakers and businesses alike have long criticized Indiana’s high health care prices but have yet to punish any industry players. Advocates are hoping for more in the 2023 session, which begins Monday, with a major focus on public hospitals.
Hoosiers have some of the highest costs in the nation despite their low cost of living and below average wages. A recent report from the Rand Corp., a nonprofit public policy research organization, found that the Hoosier State’s hospital rates are the seventh highest in the nation, a slight decline from previous years.
“(Hospitals) do everything they can to prevent competition but then they want to have the freedom to price (services) however they want,” said Al Hubbard, chairman of Hoosiers for Affordable Healthcare. “If you don’t have competitions then you’re taking advantage of the situation and that’s what hospitals do.”
Brian Tabor, president of the Indiana Hospital Association, said hospitals are willing to do their part to lower rates, and said rates will decrease over time because of new transparency programs.
“We’re confident we’re headed in the right direction, but we’re also at a time when hospitals across the country are facing a serious financial crisis, and the wrong policies can have a negative impact,” Tabor said. “There’s no question we still need to address the unaffordability of Hoosiers, and hospitals are doing our part. But until all sectors of health care are at the table and there is equal transparency, we will not make progress for a long time.”
Legislators passed a bill in 2020 creating a claims database, creating a hospital pricing transparency tool in hopes Hoosiers can shop around for the best prices. But the needle hasn’t moved enough to make savings.
“People don’t buy rates after meeting the deductible because they see it as free (with their insurance). When people are faced with a fragile health situation they don’t buy anywhere; they do what their doctor tells them to do,” said Hubbard.
Public health funding is at risk
Just before the 2022 session, House Speaker Todd Huston and Sen. Rodric Bray sent letters to health insurance companies and health care plans warning that if the companies don’t lower their rates, the State Assembly will.
Indiana University Health, the largest health care company in the state, announced recently that it will be freezing its prices until 2025, which some called a “trick” since their costs far exceed national averages. Speaking on behalf of the state’s hospitals, the Indiana Hospital Association promised to lower overall health care costs but rejected “heavy-handed government intervention.”
But hospitals often note that Hoosiers have some of the worst health outcomes in the country, including higher rates of smoking, higher rates of diabetes and higher rates of maternal/infant mortality. This contributes to the state’s higher than average health care costs and needs to be addressed, the hospitals said.
Local health systems typically address those issues but have been ineffective because of poor public health funding in Indiana, which ranks 47th in the nation. The Governor’s Public Health Commission, of which Tabor was a member, reported that Indiana spent just $45 per person in public health dollars compared to a national average of $91.
Tabor said hospitals need stability at this time, not more intervention, to recover from years of stress that stretched the health care system during the COVID-19 crisis.
“I hope this is a session about investing in health care, not putting an already fragile system at risk,” Tabor said. “Hospitals, and the entire health care system, have not begun to rebuild from years of depression that stretched our resources beyond belief. We must make sure that hospitals and caregivers have the resources they need and reject policies that would disrupt the system in these changing times.”
But Republican leaders who are writing the budget appear skeptical that they can meet the commission’s recommended request of $243 million, even though one-third of Indiana counties spend $10 or less per resident on public health.
“I found it hard to swallow,” GOP Senate Majority Leader Rodric Bray said in November, adding that local departments may not be able to handle that much money at once.
In response, the supporters amended their request, suggesting that the state phase in funding during the biennium and reduce their request in half, to $ 120 million, for the fiscal year 2024.
“We will have to discuss that because it is ongoing,” said Sen. Ryan Mishler, who leads the budget program in this chamber. “That’s not a one-time, ongoing deal, so we have to take a good look at that.”
But funding in the second year at the full $243 million “would be difficult,” Mishler said.
Hospitals are widely scrutinized
Sen. Travis Holdman, R-Markle, says he has a way to pay for public health improvements: shifting costs to hospitals.
Holdman, chairman of the Fiscal and Fiscal Policy Committee, has proposed imposing taxes or assessments on hospitals and health insurance companies that do not adequately serve the public. He said the organizations, which do not pay taxes, funnel profits into Wall Street investment accounts, accumulating so much in their accounts and reserves that many can operate for more than a year without charging anyone.
“What are they doing to return the public benefits they promised to provide because of their non-profit status?” Holdman said at the December conference. “I would recommend Parkview Hospital in northeast Indiana. They created and innovated a grocery story in Fort Wayne’s food desert.”
He said the effort—along with promoting smoking cessation and reducing maternal and infant mortality rates—would do more to benefit the community than paying thousands of dollars to host a local sports stadium or YMCA.
Hospitals have been targeted repeatedly by Ball State University economist Mike Hicks, who highlights the role of violence in high health care costs in Indiana.
Market researchers confirmed some of Hicks’ criticisms this summer, reporting that mergers and acquisitions have increased prices, increasing per capita health care spending by 48% between 2011 and 2020. That study found that Parkview Health, the same organization that Holdman recommends, has a monopoly in the northeast corner of the state, resulting in higher monthly premiums than the rest of the state.
Tabor pushed back on the monopolies debate, noting that just two insurance companies control about 75% of the Indiana market. Indeed, some mergers among hospitals—opponents say have reduced competition—stabilize health care facilities.
“What’s ironic about the consolidation discussion is that many of the hospitals that became part of the health plan could not survive on their own, so we need to be careful that we’re not actually making access to care worse by weakening our Indiana providers,” Tabori said.
But Hubbard didn’t seem to agree with Tabor, saying less competition is hurting Hoosier consumers.
“If these were not for profit, we would have followed them. It all has to do with their prices. And what we found, what the RAND (studies) found, is that the non-profit guys are the ones with the highest prices,” Hubbard said.
Hubbard said hospitals across the country are struggling because of the COVID-19 pandemic, where overworked health care has left the industry in droves. But Hoosier hospitals still have some of the highest costs in the country, even in states with lower-than-average costs of living and earning power.
“The easiest way to fix this is to pass a law that says you can’t charge more than the national average … that’s what we did with workers’ comp and it worked. “We were one of the most expensive states in the country and now we’re in the middle,” Hubbard said. “If we can’t do it with compensation we will come back and ask for a hard ceiling.”
It focuses on out-of-hospital prices
Despite high health care costs and public health, the 2023 session will also be the first regular session since the General Assembly passed a comprehensive summer abortion ban. While some conservatives argue that the ban doesn’t go far enough–since the law allows exceptions for rape or incest–leaders are unlikely to seek an amendment because of divisions in their caucuses.
But other topics from the abortion ban debate may resurface, including access to contraception and government support for families—both of which received enhanced funding in a bill designed to accompany the abortion ban.
Rep. Rep. Rita Fleming, D-Jeffersonville, has long pushed to expand prescription contraceptives to pharmacies, which are the most convenient option for many Hoosiers — especially those in areas with a shortage of nurses or doctors.
“We know that most people abort pregnant women unintentionally. “So if we really want to get into the issue—if we want to reduce abortion—then it makes sense to reduce unintended pregnancy,” Fleming said.
Legislators narrowly rejected an amendment expanding access to contraceptives in a special committee by a 48-49 vote that included the support of several key Republicans.
“I think there are people on both sides of the aisle who understand that expanding access to birth control … is a great idea. “I really think that no matter who owns it, it will pass the house,” said Fleming.
In addition to reproductive health care, Fleming said Indiana needs to increase its number of providers, especially in public health and mental health.
“We need to encourage providers to work in Indiana and help with these mental health issues,” Fleming said. “We need to help people understand that it can be a chronic disease and you can’t cure someone at once, it continues.”
Additionally, the retired OBGYN said he wants to reduce administrative burdens to free up doctors to spend more time with their patients, saying doctors spend an average of 15 hours each week handling pre-authorizations or denials of necessary procedures.
The Indiana Capital Chronicle is an independent, nonprofit news organization covering state government, politics and elections.