Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
We all know that Indiana’s health care costs are above the national average, but do you know why they have increased 48% in less than 10 years? A practice known as “dishonest billing” is partially to blame.
In recent years, Indiana’s large hospitals have merged with physicians, insurance groups and other competing providers, creating large hospital systems that now monopolize the market. These highly concentrated hospital systems have resulted in a lack of competition and higher prices for both patients and employers.
Small-business owners have long dealt with the threat of monopolies. When a single company dominates a market, competition significantly decreases, prices increase and, all too often, the smaller player is forced to forfeit. Small-business owners can easily recognize the familiar link between hospitals’ growing market dominance and our state’s skyrocketing health care prices.
Large hospital systems taking advantage of their growing monopoly power to maximize their profits is a predatory practice some call dishonest billing. This occurs when big hospital systems buy up small, independent doctor’s offices and take over their billing operations, tacking on additional hospital-facility fees, despite the patient never stepping foot inside a hospital or on its campus.
This billing loophole allows hospital systems to charge a facility fee for services provided by any health care provider it employs and at any facility it owns regardless of where the patient receives care. That means patients receiving the same care from their same doctor at the same location can be charged up to 14% more if their doctor is employed by a hospital system.
Dishonest billing is a revenue-generating tactic leveraged by the state’s big hospital systems that has contributed to profit margins that are four to five times higher than the national margins. A recent study from the Rand Corp. comparing costs of health care across 49 states found that Indiana’s hospital facility fees are the fifth-highest in the country.
In Indiana, like many other states, a core component of our economy is the jobs created by small businesses. There are nearly 500,000 small businesses in Indiana, employing more than 1.2 million Hoosiers. Yet many small employers struggle to find affordable health care benefit packages for their employees.
Twenty years ago, almost half of our nation’s small businesses offered health insurance to their employees. When the Affordable Care Act passed in 2010, that portion had fallen to just under 40%. Today, it stands at just 31%.
Indiana Senate President Pro Tem Rod Bray and House Speaker Todd Huston have called on Indiana’s 20 largest hospitals to reduce prices to the national average by 2025. They put CEOs on notice—rein in costs, or the Legislature might do it for them.
To date, Indiana University Health is the only hospital system in the state that has committed to the challenge. If Indiana’s hospital prices were reduced to the national average, Hoosier families would save, on average, $2,500 every year.
Small businesses need lawmakers to do everything in their power to reduce this cost burden and address the true cost drivers in the health care market. Senate Bill 6, authored by Sen. Ed Charbonneau and co-authored by Sen. Justin Busch, would protect patients and employers from dishonest billing and is a great place to start.
Now is the time for our General Assembly to pass legislation that prohibits dishonest billing and once again allows our small-business owners here in Indiana to provide affordable insurance to their hard-working employees.•
__________
Robinson is the state director for NFIB in Indiana.
Please enable JavaScript to view this content.