Key Indiana lawmakers are stepping up pressure on hospitals and health insurers to cut “runaway costs” of health care, saying prices in Indiana are well above the national average and must come down.
Speaker of the House of Representatives Todd Huston and Speaker of the Senate Rodric Bray on Tuesday sent a joint letter to 20 hospital and insurance managers, telling them to submit a plan by April 1 that would reduce the prices of hospitals in Indiana at or below the national average by 2025.
“In the absence of a viable plan, we will have no choice but to pursue legislation aimed at legally reducing prices,” the letter said.
The letter did not say what type of legislation could be drafted to deal with the cost of health care in Indiana. But it signaled that the Indiana General Assembly would not hesitate to venture into one of the most complex and regulated industries in the country, unless the players take sufficient action to bring prices down.
The letter pointed out that Indiana’s hospital costs – or the expenses that hospitals charge to cover their overheads and keep the doors open – are the fifth highest in the country, according to a 2020 RAND Corp study. .
The study also found that Indiana ranks sixth nationally for hospital price disparities – ahead of New York City, California, Massachusetts and other larger states with higher cost of living – in how much private insureds pay for care versus what Medicare would pay for care. have paid for the same service.
“The ability of Hoosiers to pay hospital prices that are often 50% or more above the national average is untenable and unfair,” said the letter from Bray and Huston. âTo ensure the economic viability of Hoosiers healthcare payers, we need your help in solving this problem.
Several Indianapolis-based hospital systems, including the Indiana University Health and Community Health Network, referred questions Tuesday to the Indiana Hospital Association, a professional group that lobbies on behalf of its members.
Brian Tabor, the association’s president, called Bray and Huston’s letter “disappointing.” He said the RAND study confused health care unit costs with Indiana’s relative health care costs, which he said were in line with neighboring states.
âI think it kind of perpetuates this notion that Indiana is an outlier in health care costs,â Tabor said. “And I don’t think that’s helpful in trying to create a collaborative environment to address affordability.”
He added that several hospital systems have recently taken steps to freeze or lower prices.
Indiana University Health, which charges the highest hospital fees in the Indianapolis area, last month said it was freezing prices until 2025 to help align with national average prices.
Also last month, Parkview Health System in Fort Wayne said it had struck a deal with insurer Anthem Blue Cross and Blue Shield of Indiana to provide more affordable services. According to the RAND study, Parkview was Indiana’s most expensive hospital system.
Details of this deal were not made public. Anthem did not immediately respond to IBJ for comment on the Parkview deal or the letter from Bray and Huston.
But some groups have said hospitals in Indiana are charging excessively high prices, citing numerous studies, including the RAND study. One group, Hoosiers For Affordable Healthcare, says a large chunk of the cost of hospital care is borne by Indiana employees and their workers, holding back the state and hurting the Hoosiers portfolio.
“Please join Hoosiers for Affordable Healthcare in thanking President Huston and President of the Senate Pro Tempore Bray for their leadership in reducing the cost of hospital care for Hoosiers!” The group tweeted on Tuesday.
Huston and Bray’s letter was careful to thank doctors and hospitals in Indiana for their work during the pandemic. But in a press release, Huston, R-Fishers, said he heard from many Hoosiers and employers who are “rightly frustrated and overwhelmed” with the prices of healthcare.
âNow is the time to bring the stakeholders together and craft a plan that would see payers realizing tangible savings,â Huston said in written remarks. âOur goal is to maintain a high quality of care while reducing costs. “
Bray, R-Martinsville, said in a press release that he understands healthcare pricing structures are complicated.
“But that’s no excuse to ignore the problem and let prices rise – at a rate well above inflation – to the detriment of hard-working Hoosiers and business owners.”