The state’s five largest nonprofit hospital systems again cleared a statutory pricing benchmark in 2024, according to the latest report commissioned by the Indiana Department of Insurance.
The analysis, by actuarial consultant Milliman, includes Ascension Health, Community Health Network, Franciscan Health, Indiana University Health and Parkview Health — minus critical access hospitals. It was the second edition of the annual report.
Prices for the commercially insured market were compared to 285% of what Medicare would have paid, in accordance with 2023’s House Enrolled Act 1004. The 65-page document was completed in November but uploaded publicly late last month.
All five systems came in under the benchmark for 2024, per the report:
- Ascension: 254%
- Community: 236%
- Franciscan: 271%
- IU Health: 237%
- Parkview: 262%
The Indiana Hospital Association celebrated the results, describing the 252% average as a full 33 percentage points below lawmakers’ reference point.
“The data is clear: Indiana hospitals are lowering prices while navigating some of the most difficult financial conditions in recent history,” said Scott B. Tittle, the organization’s president, in a Tuesday news release.
Tittle called on insurers to pass those savings along.
But not everyone is applauding. The Employers’ Forum of Indiana said the inclusion of hospital-owned medical groups’ professional fees “has a material effect upon reported prices, reducing average “hospital” prices (aka, facility prices) by 30 to more than 50 percentage points.”
Physician fees “should not be averaged with hospital facility fees because this mingling gives misleading information on the prices for each,” the employer-led health care coalition added Monday night.
The hospital association, meanwhile, said Indiana’s insurer-set physician reimbursement rates are among the lowest in the country, forcing hospitals to subsidize physician practices.
Each system met the benchmark across three years of analysis. The 2024 results, however, showed across-the-board decreases from 2023, with more mixed results compared to 2022.
“The state’s analysis reflects the dedication of our teams who work tirelessly to innovate, streamline workflows and ensure we’re providing the right care, in the right place, at the right time,” said Dr. Jason Row, the president of Parkview Physicians Group and chief value transformation officer for Parkview Health. “But we also understand that affordability is not a single project, it’s a systemwide commitment. From reducing medical debt to expanding lower‑cost care settings, we’re focused on doing what’s right for our patients and our communities.”
Practitioner services for the five systems were calculated at over 100% of Medicare. Inpatient care was above 200% of Medicare, while outpatient services were at or above 300%.
Milliman cautioned that the percentages should each only be compared to the 285% standard, and not to each other.
That’s because the “full Medicare” figures include the hospital-specific payments Medicare provides for inpatient services. All of the hospitals included in the report have one or more hospital-specific adjustments, which the consultants noted increase their reimbursement from Medicare by up to 52%.
Milliman also performed “modified Medicare” calculations, without the hospital-specific payments, to produce numbers that could be compared across hospital systems — but not to the benchmark.
In this version, Community came out on top, at 247% of modified Medicare, followed by IU Health at 258%. Ascension and Parkview tied at 275%, while Franciscan lagged at 283%.
“Since Modified Medicare is in the denominator of these percentages, removing the hospital-specific additional payments decreased the Medicare amounts, which, in turn, caused the percentages to increase,” the consultants reported.
They also analyzed the average commercial price, as a percentage of full Medicare, for three chunks of the commercially insured population: self-funded group health insurance, fully insured groups with insurance carrier plans and individual-level plans.
The individual market percent of Medicare was generally “much lower” than for either of the group markets. But much of the data couldn’t be mapped to a specific market segment, so results could “differ notably” if that information were available.
The report additionally compares the 2022 data to that year’s results in an influential RAND study, which didn’t consider practitioner and some outpatient services. The consultants adjusted for those and other differences, but couldn’t account for variations in data volume, sampling and collection time periods.
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
