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Indiana hospital prices 8th highest in nation, study finds, but hospitals dismiss analysis • Indiana Capital Chronicle

US Senator Mike Braun the Republican candidate for governor of Indiana made a surprise appearance at the National Health Price Transparency Conference Monday, earning recognition for her work on health care price transparency at the federal level.

Conference emcee Gloria Sachdev, president and CEO of the Indiana Employers Forum, presented Braun and U.S. Sen. Bernie Sanders of Vermont with an award recognizing them as “Champions of Care Pricing Transparency medical.” The two, at opposite ends of the political spectrum, they worked together to an extent address transparency in hospital and insurer prices.

Gloria Sachdev, president and CEO of the Indiana Employers Forum, presents the Sage Transparency 2.0 project at a conference on May 13, 2024. (Whitney Downard/Indiana Capital Chronicle)

“This is reforming the system, not more government spending on it,” Braun said. “I will continue to push hard during the five months I have left (in Congress). Hopefully we’ll see that maybe continue to cascade. If not, and if I am successful in the November general election, I will be the most entrepreneurial governor the country has ever seen when it comes to fixing health care.”

Braun’s appearance coincided with the launch of the latest hospital pricing study by RAND Corp., a think tank, which found that Indiana hospital prices were the eighth highest in the country. Also on Monday, the Indiana Employers Forum opened. Wise Transparency 2.0a dashboard that provides cost breakdowns and revenue information for hospitals.

The Indianapolis conference drew nearly 200 attendees in person and dozens more online, with speakers including entrepreneur and venture capitalist Mark Cuban, national accounting experts, state legislators and patient advocates. The forum, which organizes the conference, seeks to improve transparency, pricing and quality of healthcare with an emphasis on value for employers.

Indiana’s hospital lobbying organization continued to reject RAND’s analysis, pointing to its own data about reduced (or even negative) hospital margins and saying the study’s data provided a “distorted” view of prices in Indiana.

“We’ve been pretty consistent (with criticism) about the RAND reports in that they are presented, I think, without proper context and usually with an agenda,” Indiana Hospital Association President Brian Tabor told the CapitalChronicle. “When you look at the totality of what employers spend on medical and health care services in our hospitals and health systems, you have to keep in mind that we have massive subsidies and financial losses associated with the supply of physicians.”

Tabor said the study did not include all spending on hospital and health system services, which would actually put Indiana in the middle of states in terms of costs nationally.

He also said Monday’s presentations “(hit) hospitals, particularly health systems,” without providing solutions or acknowledging the full context of Indiana’s low Medicaid reimbursement rates.

Price data and information.

The most important finding of the RAND study was that employers paid, on average, two and a half times more than Medicare prices, a federally established figure that is assumed to be close to a break-even number for providers who provide attention.

But Chris Whaley, one of the RAND researchers and a professor at Brown University, noted that there is a lot of variation between states and within states, but Indiana’s prices still rank high even compared to its neighbors. For example, Michigan prices compared to Medicare hovered below 200%, while Indiana was closer to 300%, on average.

“(We) collectively spend about $1.5 trillion on health care, and the biggest chunk of the pie, half a trillion dollars, goes to hospitals,” Whaley said. “… hospital care, in recent decades, has increased… by more than 200%.”

RAND researcher and Brown University professor Chris Whaley presents his findings at a transparency conference on May 13, 2024. (Whitney Downard/Indiana Capital Chronicle)

Whaley said the purpose of the study was to provide employers with information about prices negotiated on their behalf. The analysis then compares prices at more than 4,000 hospitals and 4,000 ambulatory surgical centers with Medicare.

“Without price transparency and market competition, it is not possible to have an efficient market-based healthcare system. So if we are going to continue to rely on U.S. markets for health care, we need to have greater transparency and better competition in the marketplace,” Whaley said.

The key pricing factor appeared to be the percentage of market share a hospital system had in its area, not its quality or payer mix. That means hospitals with high-income and low-income populations that receive government insurance programs fared no better or worse than their counterparts.

Lack of market competition is a problem in nearly every corner of the country, according to Whaley’s analysis, and state lawmakers have been interested in exploring the impacts of monopolies on Indiana markets.

Braun said that “sooner or later the (Federal Trade Commission) is going to get involved” when it comes to monopolies, and emphasized that he “(doesn’t) want the government to meddle in anything other than keeping markets competitive and fair.”

“…It will fall apart,” Braun told attendees. “I’ve told CEOs of drug companies and hospitals, ‘You better start buying into it or else Bernie Sanders will run his business one day.'”

Hospitals, however, say they are struggling.

Indiana hospital prices are the fourth most transparent

TO recent analysis by Kaufman Hall promoted by the hospital association found that Indiana hospitals had only a 1% operating margin in 2023, compared to national margins of 2.3%. Indiana hospitals’ profits grew more slowly than their peers, while expenses grew more quickly.

That directly contradicts what another presentation Monday from the National Academy for State Health Policy (NASHP) found. His presentation, focused on his Hospital Cost Toolfound that Indiana hospitals had higher median net profits than the national average.

Tabor said that presentation was based on information from Medicare cost reports, rather than audited financial data. But presenter Marilyn Bartlett of NASHP said the audited financial statements do not provide the same breakdown for each hospital as Medicare cost reports do.

Kaufman’s analysis, on the other hand, uses audited financial data for the entire healthcare entity, but not its investments (the same information bond markets use), according to Tabor.

“We are increasingly seeing that it is difficult to maintain access, even in our growing parts of the state. Hospitals have to pay for these services, which means huge financial losses. So you have to combine the losses in the doctors’ offices, which are separate organizations, not in the cost reports… (to) look at the total financial picture,” Tabor said.

The importance of transparency

Price transparency directly benefits patients and, by extension, employers, said Cynthia Fisher, who founded patientrightsadvocate.org. Fisher detailed the individual experiences of people trying to navigate the complexities of medical billing and the ways her organization attempted to support patients and intervene on her behalf.

“Ninety-four percent of Americans want to know prices up front. They want financial security and they don’t want to be blindsided by medical bills they will never be able to pay,” Fisher said. “Businessmen don’t want to be surprised either.”

One woman received a quote for a hysterectomy for $5,000, only to see a $74,000 bill that her insurance refused to pay, Fisher said. The hospital eventually placed a lien on her home during payment negotiations.

Cynthia Fisher, founder and president of Patients Rights Advocate, speaks about the importance of transparency at a conference on May 13, 2024. (Whitney Downard/Indiana Capital Chronicle)

“She came to us with a financial fear … of losing her home,” Fisher said.

His organization’s intervention and review of the hospital’s pricing file found that the bill should have been closer to $8,000, but the process took more than four months.

“She proved it by having access to real prices. And what did she learn from that? Estimates don’t work,” Fisher said.

While there has been a national push to provide price transparency, Fisher said such standards are applied unevenly across the country. In states like Indiana, just over half of the hospitals meet those requirements compared to a third of hospitals nationwide that post prices publicly.

“What we’re finding is that (U.S.) Health and Human Services and the federal government have been very slow to actually enforce this law, which is why we’ve only seen 14 hospitals fined,” Fisher said.

Tabor rejected this assessment, saying that the methodology was “subjective” and that others had found that compliance at the national level was much higher, closer to 80%.

Price transparency efforts have spanned three presidential administrations, most recently when President Joe Biden increased fines to $2 million. Fisher said only two hospitals have received such fines.

The lack of transparency has also influenced prices in drug markets, said Cuban, who co-founded Cost Plus Drug Company. The company sells generic medications directly to consumers and has approximately 2,500 on the list. He recently expanded manufacture their own generic drugs.

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Cuban compared his site, which shows a 15% company profit margin along with a $3 pharmacy handling fee and a $5 delivery fee, to traditional pharmacy systems that often must negotiate prices with pharmacy managers. pharmacy benefits or third-party administrators.

He pressed employers in attendance to be proactive in accessing their claims data held by insurers or other contracting parties, something Indiana recently formalized in a 2024 law requiring such partners to allow access and periodic audits. .

“The missing ingredient in healthcare is not quality of healthcare, but trust. Other than your doctor, no one trusts anyone,” Cuban said, urging employers to broadly negotiate their outside health care contracts. “…the future of healthcare in the United States is in your hands.”