As Indiana lawmakers consider several bills aimed at cutting medical costs, it’s critical that they don’t make the problem worse by furthering consolidations and closures of rural hospitals.
Health care costs should be addressed. According to a study last year by the RAND Corp., Hoosiers pay the seventh highest hospital prices in the nation. Hoosiers certainly don’t earn wages to coincide with such high rates.
Indiana struggles with overall health. The state ranked 35th in the nation in that category in 2022, according to America’s Health Rankings. Diabetes, heart disease and obesity are killing Hoosiers, and an aging population will only add to the strain on our medical system.
Hospitals are also struggling to meet demand without going bankrupt.
MIKE SCHROYER, president of Baptist Health Floyd in New Albany, testified before the Indiana House Public Health Committee that the hospital operated in the red last year. He said some of the legislation being considered, including fining hospitals who charge more than 260% of the federal Medicaid reimbursement rate, could cost Baptist Health $30 million.
Schroyer pointed to major profits enjoyed by insurers. Certainly insurance rates and reimbursements should be reviewed, but without a large-scale overhaul of medical coverage nationwide, it’s unlikely Indiana lawmakers can do much to force private companies to make changes.
The issue of medical costs will require an all-of-the-above approach. Increasing Medicaid reimbursement — as suggested by Indiana Hospital Association President Brian Tabor — is one way to loosen the squeeze on hospital budgets, thus allowing hospitals to hold down their overall rates.
There’s also the oldest play in the book for driving down costs — competition. Hoosiers need more options for medical treatment and health insurance. Allowing companies to monopolize such services hurts customers.
A 2022 study conducted by researchers with the University of California-Berkley found that three insurance companies controlled 68% of the Indiana market in 2021. Researchers also warned about similar market dominance in the hospital system.
Large systems such as Baptist Health are more likely to withstand funding issues compared to smaller, rural providers. Though the numbers Schroyer quoted to the committee are eye-catching, Baptist Health has expanded into multiple areas of Kentucky and Southern Indiana, including its $150 million purchase of the New Albany hospital in 2016.
LARGER HOSPITAL systems should anticipate the costs of staffing facilities, a reason offered for high medical expenses, before expanding.
Smaller hospitals don’t have coffers as deep, and those are the facilities that serve rural areas. If they go under, patients are forced to travel farther for treatment, and the consequences could be deadly. Legislators should make exceptions in any changes for smaller hospitals to ensure they remain open to serve their communities.
Lawmakers should provide more incentives or funding to assist with hospital hiring costs. The state is blessed with a budget surplus. Some of that money could be given back to taxpayers by lowering health costs through a partnership with providers that would require price reductions in exchange for help with employee expenses.
The Legislature should also target prescription drug costs, both at the pharmacy and the hospital, to reduce customer prices.
Medical costs have been debated for years. There’s a will in this session to make needed improvements. If all parties can cooperate, Hoosiers can benefit through greater health and lower costs.
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