Why are health care costs so high in Indiana?

Various studies show that Indiana’s health care and hospital costs are among the highest in the nation. A listener in Angola was curious about the reason behind this.

Philip Powell, a professor of business and economics at Indiana University, explained that the state’s high health care costs are due to three main factors.

“First of all, in terms of health, Hoosiers are not very healthy,” he said. We need health care more than the average American.

As a result, many Hoosiers are struggling to access health care services, which has driven up prices, Powell said. He explained that the lack of suppliers is another factor that exacerbates costs.

“In most of our state markets, it’s stocked by only a few vendors,” he said. “There’s not a lot of competition and the more competition you have, the lower the price.”

A final reason, he added, is Indiana’s lack of new health care.

“Health care systems in Indiana lack a lot of progressive features that lead to cost savings, whether it’s public health, whether it’s price transparency, so patients can afford health care,” he said.

At the beginning of this year RAND 4.0 study, A non-profit public policy research organization, It showed high costs – Especially in hospital care – for Hosiers. The study found Indiana to be the seventh most expensive state in terms of hospital costs.

The study used Medicare prices as a measure to measure costs. Powell said this may not necessarily give a complete picture.

“If you use the measure of Medicare that RAND did, you want to develop other qualitative ways to test the hypothesis of how expensive Indiana is,” he said.

During this study, IIndiana lawmakers also discussed the high costs of health care. In a letter to the state’s health care providers and insurers. Legislative leaders have said that if these providers and insurers do not make efforts to do so, they will take steps to reduce health care costs in the next session.

IU Health, the state’s largest health care system, confirmed its plan to prevent higher health care costs, including a goal to reach national average prices by January 2025.

Powell explained that it will require cooperation from these insurers and providers to push for ways to reduce health care costs.

“In other states across the country, large employers have become more aggressive in demanding modernization of health care systems,” he said. “And we haven’t seen that same critical need for innovation in Indiana that other states have seen.”

He added that the General Assembly has broad powers to hold health care providers and insurers accountable. Finally, the solution to this multifaceted problem will not be easy, he said.

But if Indiana can strive to be healthier and our health care system strives to use more innovative ways to deliver public health, I know these two initiatives will give us a head start on reducing costs.

Reporter Violet at vcomberwilen@wfyi.org Or follow her on Twitter @ComberWilen.

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