Indiana Republicans to Regulate Hospital Prices?

[Greenbeard]

There was a WSJ op-ed out yesterday with a juicy tidbit out of Indiana I had completely missed when it happened last month. After laying out the problem (hospital prices in Indiana are high), the authors mention a seismic development: Indiana's legislative leaders have stepped in to threaten regulatory intervention on hospital prices if the hospitals themselves don't figure out a way to lower them.

High-Priced Hospitals in Indiana Press Their Political Luck

According to a Rand Corp. analysis, hospital prices in Indiana are an estimated 3.4 times as high as Medicare rates and the fifth highest in the country. A Harvard study estimated Indiana’s hospital prices are 3.6 times Medicare rates and the third highest in the country.

High hospital prices increase the cost of insurance. Every dollar an employer pays for employee health insurance is one less dollar for wages and to hire more people. If Indiana’s hospital prices were to drop to the national average, family income could rise by as much as $2,500 a year. For Indiana’s hospital prices to be at the national average, all else being equal, they would need to decline by more than 20%.

Rep. Todd Huston, speaker of the Indiana House, and Sen. Rod Bray, president pro tempore of the state Senate, have called for Indiana hospitals and insurers to present a plan within three months that will reduce hospital prices to the national average within three years. Absent a viable plan, they have promised to pursue legislation to reduce prices. While there is a role for government—increasing transparency to help consumers shop and getting rid of policies that restrict competition and discourage shopping—hospitals and insurers should also step up.

In the letter linked in the piece, sent from Indiana's GOP Speaker of the House and President Pro Tempore of the Senate to the state's hospital CEOs, they're pretty explicit: by April give us your plan for lowering prices or the government will step in to lower them for you:

We are asking you to work collaboratively with third-party payers to present a plan to the legislature by April 1, 2022 that would lower Indiana's hospital prices to at least the national average by January 1, 2025, utilizing either Medicare (the national average is 263% of Medicare) or Standardized Pricing adjusted by cost-of-living as the benchmark. Our teams stand ready to assist you in any way that we can. It is not lost on us that your industry is complex and that there are myriad demands on your time.

It is our expectation that the plan will articulate measures that ensure all cost savings directly benefit policy owners (governments, private employers, and individuals). As the leaders of the critically important hospital community, you are best positioned to identify the most effective and efficient ways to lower costs for Hoosier healthcare payers. We need you to identify and implement measures that maintain a high-quality care environment and lower the cost of care.

Absent a viable plan, we will be left with no choice but to pursue legislation to statutorily reduce prices.

I have to admit, I was surprised! Even in the regulation-friendly northeast (say, Massachusetts), where there may be unspoken implications that if something isn't achieved by the private sector then at some unspecified point some kind of policy intervention could come, an explicit and imminent threat of price-setting for hospitals would be surprising.

To see Republicans in a ruby red Midwestern state going there is really something. I don't see those hospital CEOs coming up with a plan for 20% price reductions over three years, so it'll be fascinating to watch where this goes.

 

[Jkca1]

Ah, the death of Capitalism comes not from the left but from the right. Whatever happened to the free market?

 

[Greenbeard]

Ah, the death of Capitalism comes not from the left but from the right. Whatever happened to the free market?

 

[ttwtt78640]

I was surprised this year when my Medicare advantage plan (WellCare) dropped my provider (Austin Regional Clinic). Since the ‘give back’ plan pays me $95/month, I decided to simply go back to paying out of pocket for my monthly INR test.

I soon discovered why the insurance company (probably) dropped them. The cost of my monthly INR test went from $17 ($12.75 if paid at the time of service) to $41 ($30.75 if paid at the time of service). This billing change magic was accomplished by charging for two separate medical ‘billing codes’ for the same 10 minute finger prick test procedure instead of one. The INR test is still $17 (before 25% discount), but it is now accompanied by an additional ‘billing code’ charge for “coagulation management” at $24 (before 25% discount).

 

[CaughtInThe]

wow

 

[Demon]

Its all a mess. I saw the bill for my routine colonoscopy. What was charged was way more than medicare paid. And they tried to tack on a separate charge for "observation" while under conscious sedation. Medicare rejected that bill (around $40 - $50) which I think they should have - its part of an anesthesiologists job to observe.

But yes, too funny that this is coming from the right.

Edited for spelling after @ttwtt78640 caught my typo!

 

[ttwtt78640]

Its all a mess. I saw the bill for my routing colonoscopy. What was charged was way more than medicare paid. And they tried to tack on a separate charge for "observation" while under conscious sedation. Medicare rejected that bill (around $40 - $50) which I think they should have - its part of an anesthesiologists job to observe.

But yes, too funny that this is coming from the right.

I hope that (bolded above) was routine.

 

[Demon]

I hope that (bolded above) was routine.

Lol. Yes. I would want to be fully sedated if it was a routing colonoscopy!

 

[Integrityrespec]

There was a WSJ op-ed out yesterday with a juicy tidbit out of Indiana I had completely missed when it happened last month. After laying out the problem (hospital prices in Indiana are high), the authors mention a seismic development: Indiana's legislative leaders have stepped in to threaten regulatory intervention on hospital prices if the hospitals themselves don't figure out a way to lower them.

High-Priced Hospitals in Indiana Press Their Political Luck



In the letter linked in the piece, sent from Indiana's GOP Speaker of the House and President Pro Tempore of the Senate to the state's hospital CEOs, they're pretty explicit: by April give us your plan for lowering prices or the government will step in to lower them for you:



I have to admit, I was surprised! Even in the regulation-friendly northeast (say, Massachusetts), where there may be unspoken implications that if something isn't achieved by the private sector then at some unspecified point some kind of policy intervention could come, an explicit and imminent threat of price-setting for hospitals would be surprising.

To see Republicans in a ruby red Midwestern state going there is really something. I don't see those hospital CEOs coming up with a plan for 20% price reductions over three years, so it'll be fascinating to watch where this goes.

I've got nothing against lower hospital prices but they better to an accurate cost analysis. You can't assume that cost is the same in every state or even every part of a state. Also volume of business can affect cost and profit.
Maybe the answer is a cost + analysis which would create some volatility in rising/falling cost.
Is the government also going to step in to lower the cost of med school, nursing school, and all others in the med profession.

 

[Lycanthrope]

Fake news! Everyone knows conservatives are all about the free market regulating itself.

Don't like the price of Grandma's prescription? Find a different source! Can't find one? Put her on horse dewormer! That'll learn Big Pharma!

 

[Nomad4Ever]

Holy shit, that’s amazing. Hopefully the legislation is successful and popular so the GOP sees how needed these types of programs are.

 

[Ishm]

It's weird really. The US has the worlds least regulated healthcare market, but provides the worlds most expensive healthcare. Why aren't free market principles working?

 

[ttwtt78640]

It's weird really. The US has the worlds least regulated healthcare market, but provides the worlds most expensive healthcare. Why aren't free market principles working?

The percentage of publicly subsidized customers and EMTALA might be factors. If my bill (payment?) for housing was fixed (or nonexistent) then why not opt to buy a bigger and/or fancier house?

 

[Ishm]

Aren't the publicly subsidised costs (Medixxx) normally negotiated lower, and that's why some doctors etc don't deal with them?

 

[reflechissez]

Aren't the publicly subsidised costs (Medixxx) normally negotiated lower, and that's why some doctors etc don't deal with them?

yes

 

[Greenbeard]

Is the government also going to step in to lower the cost of med school, nursing school, and all others in the med profession.

You'll have to ask the GOP legislative leadership in Indiana!

 

[Greenbeard]

But yes, too funny that this is coming from the right.

It's certainly shocking to see red state Republicans taking this tack and I can't say I know if there's something else going on here.

But perhaps more broadly it indicates we're nearing a breaking point, where even the right is no longer willing or able to sit by and accept what's happened(ing) with hospital prices. There was a bit of mitigation of price increases in the 2010s, but if hospital prices continue to tick up we may end up with some bipartisan consensus around price-setting (maybe even via a single-payer approach) within a decade or so.

 

[Demon]

It's certainly shocking to see red state Republicans taking this tack and I can't say I know if there's something else going on here.

But perhaps more broadly it indicates we're nearing a breaking point, where even the right is no longer willing or able to sit by and accept what's happened(ing) with hospital prices. There was a bit of mitigation of price increases in the 2010s, but if hospital prices continue to tick up we may end up with some bipartisan consensus around price-setting (maybe even via a single-payer approach) within a decade or so.

We do at least have a 'surprise billing' bill out there. Not sure of the details of who voted for or against. Not much, but it will help.

 

[Greenbeard]

We do at least have a 'surprise billing' bill out there. Not sure of the details of who voted for or against. Not much, but it will help.

Like most things that get through Congress these days (in the 'filibuster-everything' era), the No Surprises Act passed because it was tucked inside of a giant omnibus package of must-pass legislation, in this case a consolidated appropriations bill. But with the federal government paralyzed on addressing most issues, that leaves a lot of room for states to try things on their own. We'll see soon if Indiana picks up the ball and runs with it or if these threats are just bluster.

 

[Demon]

Like most things that get through Congress these days (in the 'filibuster-everything' era), the No Surprises Act passed because it was tucked inside of a giant omnibus package of must-pass legislation, in this case a consolidated appropriations bill. But with the federal government paralyzed on addressing most issues, that leaves a lot of room for states to try things on their own. We'll see soon if Indiana picks up the ball and runs with it or if these threats are just bluster.

CO has their own version, but it only affects policies regulated by the state. I think the ACA policies fall under that, and maybe employer provided insurance.

 

[ALiberalModerate]

The percentage of publicly subsidized customers and EMTALA might be factors. If my bill (payment?) for housing was fixed (or nonexistent) then why not opt to buy a bigger and/or fancier house?

Or it could just be that necessary healthcare is a market failure. Half the healthcare markets are a monopoly and when you should up having heart attack, its not like you can balk at the price.

 

[Court Jester]

I've got nothing against lower hospital prices but they better to an accurate cost analysis. You can't assume that cost is the same in every state or even every part of a state. Also volume of business can affect cost and profit.

Bingo!!!

And the obesity problem in Indiana, especially Marion county is through the roof. Deal with that effectively, not just in Indiana but everywhere else, and you begin to solve most of our healthcare cost crisis. If we had a war on obesity, like there is a war on tobacco, then that is where politicians can make a difference. But the answer is education, and ask me, but I have no problem with some fat shaming too. Do schools even make kids run around the track till their balls are sweating off anymore?

Maybe the answer is a cost + analysis which would create some volatility in rising/falling cost.
Is the government also going to step in to lower the cost of med school, nursing school, and all others in the med profession.

Great point!

 

[ttwtt78640]

Or it could just be that necessary healthcare is a market failure. Half the healthcare markets are a monopoly and when you should up having heart attack, its not like you can balk at the price.

Yep, as if housing was not a necessity so it’s fine to have it remain a private market.

 

[ALiberalModerate]

Yep, as if housing was not a necessity so it’s fine to have it remain a private market.

That isn't comparable. The barrier to becoming a home builder or working in the trades is pretty low. You have market failures when you have a necessary service with a high barrier of entry, common monopolies, obfuscated pricing, and costs imposed for services that people didn't even know they consumed.

For example, routine healthcare is just 7% of healthcare spending. Drugs, for all the blame they catch, are just 10% of healthcare spending. Why, because in both instances you can shop around. In the case of critical care, non-elective surgeries, cancer treatments and so on, you can't shop it. You just pay whatever they demand. We have some of the most expensive healthcare in the world. We don't have the best healthcare, just the most expensive.

 

[ALiberalModerate]

Bingo!!!

And the obesity problem in Indiana, especially Marion county is through the roof. Deal with that effectively, not just in Indiana but everywhere else, and you begin to solve most of our healthcare cost crisis. If we had a war on obesity, like there is a war on tobacco, then that is where politicians can make a difference. But the answer is education, and ask me, but I have no problem with some fat shaming too. Do schools even make kids run around the track till their balls are sweating off anymore?





Great point!

So you would be in favor of taxing obesity out of existence?