Lower prices can be found at many smaller health systems, but they vary widely across the state and country.
Preliminary data from a non-partisan study reveals a troubling, but familiar, trend in Indiana healthcare—it’s among the most expensive in the country.
But, the newest data revealed an even more surprising trend—Indiana physicians receive the fourth lowest share of revenue, while hospitals charge among the highest rates on a per procedure basis.
The Indiana Hospital Association takes issue with some of the ways in which the data was collected and analyzed. It argues prices are coming down because of plans measures health systems have taken in recent years, but those are of little significance to patients saddled with bills.
For cancer patients in Fort Wayne, Dr. Lakshmi Aggarwal provides a glimmer of hope. She’s an oncologist and part of a declining number of independent physicians.
According to data from the American Medical Association, the national share of independent physicians declined five percentage points in 2020, the largest drop ever, and the first time its below 50 percent for the first time since the surveys began in 2012.
Researching prices aren't a step most patients take
Her advice to patients concerned about high prices: do your research.
But that’s not easy for many of the folks she’s caring for.
“My patients are elderly, tired, beaten up by their cancer,” she said from an exam room in her practice. “How dare I tell my patient ‘Look at your bill, look at what it costs you have the numbers gone up drastically.’"
Aggarwal believes the entire system from providers, insurers, regulators, and ultimately individuals are needed to fix what she believes is a threat to her patients’ well-being.
But for her patients—many of whom are dealing with a serious cancer diagnosis—taking the time to shop for the best price is out of the question.
“How can I even say that?” she asked. “So what am I supposed to advise? I don't know. I'm only inside looking at the ugliness [of the system],” she said.
Aggarwal doesn’t believe Indiana can reverse course and lower healthcare costs without significant reform.
“The healthcare industry is diseased in America,” she said. “That's the problem and we're putting big band aids and throwing a lot of money after a diseased system.”
The diagnosis largely depends on who you ask. Almost everyone interviewed agrees with Aggarwal—the problems are complicated and multifaceted.
Providers, like hospitals, argue more transparency has lowered prices and are lobbying for lawmakers to give them more time to derive market solutions. This comes on the heels of House and Senate leadership asking healthcare stakeholders to file solutions to the high prices.
Brian Tabor, President of the Indiana Hospital Association argues different data points are valuable to look at, and insists prices are coming down.
He placed some of the blame on insurance companies—which negotiate rates on behalf of the employees they cover.
“It's important to remember that the results of the RAND study are prices that have been, I would say negotiated, but in some cases dictated by the largest insurance companies,” he said.
Insurance companies place some of that blame back on hospitals, though.
“The trend continues, doesn't it?” Marty Wood, President of the Insurance Institute of Indiana said. “They've done numerous studies and, you know, this is the RAND 4.0, but you've got other studies that have been cited, that have consistently shown, Indiana hospitals are some of the most, if not the most, in certain places, expensive in the country.”
Wood’s referring to the fourth iteration of a study that looks at how hospitals charge private payers for procedures. Public rates are largely set, but private rates are negotiated and often higher—in some cases a lot higher.
But Gloria Sachdev, with the Employers Forum of Indiana, argued that’s only part of the problem in Indiana.
“We’re fourth highest in the country for hospital prices, and fourth lowest in the country for physician payment. So, we really have two problems,” she said.
The forum touts a transparency portal that’s publicly viewable. Sachdev said that’s a good start. But without regulation healthcare will continue draining resources from Hoosier employers—which in turn impacts employees.
“You would think for these Ferrari prices that we're paying for health care, we would have awesome quality.”
Sachdev said that isn’t the case. “We're paying a lot for health care, but we're not getting really great results from that.”
According to RAND 4.0 study authors, it’s been that way for a long time.
Is competition a problem? It depends on who you ask.
“So in several rounds, we found that prices in Indiana, are higher than both the national average and higher than neighboring states,” Christopher Whaley, a non-partisan policy researcher who has worked on several hospital-related studies in Indiana said.
That same preliminary data from RAND, a non-profit think tank that’s compared procedure costs across state lines, found Indiana physicians make comparatively less than in other states.
The Indiana Hospital Association doesn’t believe that, or other issues, are because of a lack of hospital competition.
“It's a really competitive market here, and that's true of other markets in the state, as well, but we do have a very large insurer that is the dominant player Anthem.”
Unsurprisingly, the Insurance Institute of Indiana rebuts that claim.
Whaley isn’t convinced either.
“We know that many hospital and other provider markets in the state of Indiana are relatively concentrated and dominated by large systems relative to what we see elsewhere in the country.”
Whaley said the lack of hospital competition was “certainly one contributing factor” to the state’s higher than average price.
Back in Fort Wayne, Dr. Aggarwal has no plans to stop fighting. She’s trying to rally other physicians to get together, and while she admits her administrative costs to run her practice continue to skyrocket, she has no plans to shut her doors.
It’s the patients that keep her coming back. While many physicians stop doing hospital rounds as they get older, Aggarwal exclusively does them now because it gives her more time with the people who need her most.
“Has the human body changed in 50 years? I don't think so,” she answered. “So what's the problem? I don't know. Very capitalistic country. We will make money off of anything, even human beings.”
