Lower Prices, Increased Accessibility, Increased Transparency
Use state fiscal tools to incentivize hospitals to lower prices: Hoosiers for Affordable Healthcare recognizes that industry driven efforts to reduce the price of hospital care are preferable to government mandated solutions. In an effort to encourage not-for-profit hospitals that are not county owned to lower prices to the national average by January 1, 2025, the legislature should consider using state fiscal tools as an incentive to encourage hospitals and insurers to lower their prices to the national average. Hoosiers for Affordable Healthcare recommends three strategies for accomplishing that goal:
- Require any not-for-profit hospital that is not county owned wishing to receive its full share of the hospital assessment fee (HAF) to lower its prices to the national average (Effective 1/1/25).
- Implement a payment in lieu of taxes (PILOT) for not-for-profit hospitals that are not county owned with prices above the national average (effective 1/1/25).
- Impose a financial penalty equal to the amount charged above the national average price of hospital care against the revenue of not-for-profit hospitals that are not county-owned and whose prices are above the national average (Effective 1/1/25).
Create Tax Incentives that encourage Indiana businesses to adopt ICHRA plans: The Individual Coverage Health Reimbursement Arrangement (ICHRA) is a new tool that allows businesses of all sizes to offer employees a monthly allowance of tax-free money, allowing them to buy health care services that fit their unique needs while controlling costs. ICHRA plans meet an employer’s requirements under the Affordable Care Act. ICHRA plans benefit employees by allowing an employee to purchase a plan that fits their individual needs. Additionally, ICHRA plans are portable, which makes it possible for insurance to go with any employee when he or she changes jobs. Increased adoption of ICHRA plans by Indiana businesses should serve as an incentive to increase the number of insurance companies competing for business in Indiana, which should increase competition leading to lower prices.
Level the playing field between health insurance providers: Implement a comprehensive framework that encourages greater competition in the health insurance market. Indiana’s insurance markets are highly concentrated. Market concentration results in higher priced insurance for Hoosier consumers. Employer sponsored insurance premiums for a single-enrollee plan in Indiana represent 14.1% of workers’ average annual pay, almost 3% more than the national average of 11.2% of workers’ average annual pay. Indiana lawmakers should adopt a framework that:
- Increases competition in the health insurance market
- Creates an insurance marketplace that offers smaller insurers a fair opportunity to compete
- Reduces state regulatory burdens by simplifying and streamlining regulations and forms for insurers and consumers
Eliminate Hospital Facility Fees for Services Rendered Outside a Hospital Campus: Prohibit site-specific facility fees for services rendered at physician practices and clinics located more than 250 yards from the campus of a not-for-profit hospital that is not county owned.
Increase Competition: Prohibit the use of non-compete agreements between not-for-profit hospitals that are not county owned and licensed medical personnel.
Increase Accessibility: Join 26 other states and the Veteran’s Affairs Administration by embracing a Full Practice Authority environment for Advanced Practice Registered Nurses (APRNs) by eliminating the requirement for physicians to review five percent (5%) of APRN charts. (Note: Indiana suspended the requirement for physician review of APRN charts for 22 months during the COVID-19 pandemic)
Create transparency and accountability in the health insurer broker market: Hoosier health insurance policy purchasers should be confident that the plan suggested by their broker represents the best value available to the client. The legislature should require health insurance brokers to have a fiduciary duty to each client and to disclose the commissions and fees a broker receives for each policy they sell.
Support the expansion of independent primary care physician practices: Implement a comprehensive framework that encourages establishing independent primary care physician practices. Indiana’s physicians have the fourth lowest physician reimbursement rate relative to Medicare (126% of Medicare), while Indiana hospitals have the 4th highest reimbursement rate relative to Medicare (329% of Medicare). The low physician reimbursement rate, coupled with the crushing state and federal regulatory burden faced by many independent primary care physicians, forces many practices to sell to large not-for-profit hospital corporations. As a result of consolidation, Hoosiers pay substantially higher hospital prices than residents of other states for healthcare. Indiana lawmakers should adopt a framework that:
- Increases reimbursement rates for independent primary care physicians
- Provides financial support for federal and state regulatory compliance
- Provides financial incentives for doctors who commit to serving as independent primary care physicians for a minimum of ten years
Leverage the purchasing power of the state and the relative enormity of the state employee health benefit plan as a catalyst for reform: The state employee health benefit plan represents the largest group of individuals covered by a single plan in the Hoosier state. Nearly 60,000 lives are covered under the plan, which is directly funded by Hoosier taxpayers. The Indiana legislature and the executive branch should require insurers providing coverage under the plan to adopt policies that lower the price of hospital care, prioritize prevention over treatment, and balance reimbursement rates between hospitals and independent physicians, while maintaining a commitment to high quality healthcare for individuals covered by the plan. In an effort to augment the impact that the state employee health benefit plan can have on the private insurance market, policymakers should consider expanding eligibility for coverage under the state employee health benefit plan to K-12 employees and municipal employees.
Drug Pricing Disclosure: Require not-for-profit hospital pharmacies (excluding those that are county owned), to disclose the amount of the prescription drug markup charged to all classes of payers.