By Lindsay Doty
A new study published by the non-profit research group RAND Corporation says hospitals are charging privately insured patients more than double what they charge Medicare patients. Indiana is ranked as having some of the highest private prices among the states analyzed.
The research found discrepancies in how much employers pay hospitals to treat sick or injured employees compared to Medicare reimbursement rates.
The analysis looked at private health plans at 1,598 hospitals from 2015 through 2017 in 25 states, according to RAND.
Hendricks Regional Health reacted to the results with some questions.
“I think it was frustration and concern. In West Central Indiana we have done as much as we can do and as much as employers have asked us to do to be their partner for delivering a low- cost high -quality healthcare,” Hendricks Regional Health President & CEO Kevin P. Speer said.
“The concern is when you get misinformation in the marketplace, it can be a distraction. It can be disruptive to what are otherwise very good initiatives.”
Hendricks Regional Health Chief Strategy Officer Gary Everling says they are doing their own analysis on what RAND did. While HRH executives can’t speak for other Indiana hospitals, they say their costs are not that high.
Nearly seven years ago, HRH leaders sat down with business partners in West Central Indiana to offer a healthcare plan to contain expenses for employers and their employees.
“We work directly with 400-plus employers in West Central Indiana and for many of those we’ve entered into employer clinics, we’ve taken on school nurses, we do wellness programs and we’ve created a narrow network of options for them,” explained Everling. “For those employers who have chosen to work with us we have been able to save them directly, some of them, seven figures and more.”
Avon Community School Corporation added the Hendricks Regional Health network as a benefit option for its employees in 2017.
“We have experienced significant savings as a result,” Avon Community School Corporation Superintendent Dr. Margaret Hoernemann said. “As I work with local and state legislators, I constantly tout how our partnership with Hendricks Regional Health has added value and options for our employees without increasing premiums.”
While Hoosier hospitals digest the report, the study sheds light on concerns about the high cost of hospital care and private health insurance. The research is prompting a state-wide conversation about how hospitals can control costs and be more transparent about insurer-hospital contracts.
“The widely varying prices among hospitals suggests that employers have opportunities to redesign their health plans to better align hospital prices with the value of care provided,” Chapin White, the study’s lead author and an adjunct senior policy researcher at RAND, said.
According to RAND, the information collected in the study came from employers, some insurers and state agencies.
The RAND analysis was done in collaboration between RAND and the Employers’ Forum of Indiana, an employer-led health care coalition. The Forum participated in study design and recruitment, while the analysis was done by RAND researchers.
Editor’s note: Read opinion piece by Hendricks Regional Health President & CEO Kevin P. Speer in the May 18-31 Hendricks County ICON – in mailboxes Saturday, May 18.
