Healthcare costs for Hoosiers are hitting all-time highs and it is clear Hoosiers are not happy about it. Hoosiers typically spend 4.4% more of their annual income on healthcare costs than the average American. In 2017, Indiana residents paid $819 more than the national average for healthcare. In 1997, however, Indiana residents were paying $330 less than the national average! So, what changed? 

Why are healthcare costs in Indiana seemingly on the rise and what are Hoosiers doing about it?

Looking at the Money

If we look at a recent study by the Indiana Manufacturers’ Association, and We Ask America, it is clear those of us living here in the Hoosier state are not happy about the rising healthcare costs. The survey reports that making healthcare more affordable is the second most important issue to Hoosier’s right now, just behind creating jobs. 

It also shows 35% of Hoosier’s blame overpriced care as a major cause of the high prices of healthcare in the state. 22% of those surveyed said that increases in insurance costs and premiums were to blame. It is overwhelmingly clear Hoosiers are not happy with their healthcare or the costs and that is no surprise when over 33% of Hoosiers reported an unexpected medical bill within the past year! 

Also, over half of Hoosiers report an increase in the cost of insurance or out-of-pocket costs this last year as well. 

Another study on hospital prices in Indiana completed by the Rand Foundation, a nonprofit that works to promote public policy changes with data, found that employers in Indiana paid 358% of the Medicare rate for outpatient services in 2017.

An article published in the IndyStar reported Hoosier employers were paying 295% of medicare rates for inpatient and outpatient services and that many potential employers for Hoosiers have adopted a new strategy known as “ABI”. “ABI” is an acronym for “Anywhere but Indiana”. When you look at the costs employers are paying for their employees’ health in Indiana compared to neighboring states, it is no surprise that more employers are looking anywhere but Indiana. For example, the article quotes an automotive industry executive who states that for one employee’s ER visit in Indiana they pay $2,200 whereas in Michigan they only pay $800.

High healthcare costs for Hoosiers are not only impacting the residents across the state but also the potential employers and the job market in the state as well. Of course, when looking at healthcare costs it is also important to look at the health of the state.

Something To Consider: Hoosier Health

We know that high healthcare costs can lead to stressors for families and employers alike. In turn, that can negatively impact the health of the state. This can be considered a particularly ugly turn of events in states like Indiana where we have some of the worst health in the United States.

The Indiana University Fairbanks School of Public Health recently published a report about rising costs of care and the health of the state. The researchers and staff at Fairbanks suggest the most effective method for lowering health costs for the state will be through improving the health of Hoosiers

In their report, they found that in general, Hoosiers are sicker than average Americans. But, just how sick are we?

As a state, Indiana has high infant mortality rates. Infant mortality is the deaths of young children under the age of 1 compared to numbers of live births for the state. We also tend to invest small amounts in public health.

Hoosiers have noticeably low rates of flu shots and childhood vaccinations. Also, a higher rate of obesity than the national average can be found in Indiana. As a state, there are more preventable hospital stays. We also have higher rates of smoking, mental health conditions, diabetes and heart diseases than national averages.

Another overlooked piece of this puzzle is the shortage of physicians around the Midwest. Many states across the Midwest are finding that they are in the midst of a shortage of care providers. The Association of American Medical Colleges predicts the shortage will continue to grow and increase the need of primary care providers all across the United States. For example, in 2019 there was 1 physician for every 1,500 Hoosiers and 1 dentist for every 1,810 Hoosiers! So, not only are Hoosiers feeling sick but we are also having trouble finding the care we need.

Indiana is currently ranking 41 out of 50 when it comes to health. As a state, Indiana tends to be one of the worst for health in the country, and we tend to have pretty high costs of care as well. Let’s take a look at the link between the two.

Linking Hoosier Health with Healthcare Costs

There is a connection between the cost of care and the necessity of that care. For example, a healthy 24-year-old non-smoking male takes a lot less to treat when he comes in requiring a gallbladder removal, than say a 55-year-old diabetic, chronic smoker. So if our state is much sicker, then we need much more treatment

However, the need for health services doesn’t completely account for high costs because, across the state, the prices for services vary greatly from hospital to hospital even within the same provider network. So, going to an IU Health Hospital does not guarantee you one set price across the entire network. The same goes for St. Vincent and Community Health Network as well. The study by Rand also found the relative prices have also been rising across all networks, except for Community Health Systems/Lutheran which have been flat.

The Indiana Hospital Association, IHA, contests much of the data that states Indiana is shockingly higher in rates or prices when compared to the rest of the country. They feel that Indiana is competitive with neighboring states. Though, the group does recognize healthcare costs are unsustainable across the United States

Brian Tabor, the president of IHA, also thinks the connection between the need for health services directly impacts the amount we spend on care as a state. He says, “When people are healthier, they use fewer health care services, they are more productive, and they cost employers less money in terms of health benefits and missed work…” which matches the suggestion of IU Fairbanks School of Public Health’s report

A group that focuses on providing health care analysis and health policy analysis known as the Lewin Group took a look at Hoosier health costs to discover where we could begin saving. They found Hoosiers could save an estimated $3 billion if we focused on improving our health. They suggested that Hoosiers could save roughly $1.4 billion on health costs alone if we improved our health, and another $1.5 billion in the benefits to employers of lower health costs, less missed work and increased productivity. 

If there was significant improvement of our population health in the state, and we started to see these savings, then it is likely we could also start to notice the anywhere but Indiana mentality of prospective employers disappear as well. Currently, according to the Lewin Group’s analysis, employers pay heavily for the poor health of Hoosiers. So much so, that employers could potentially get a savings of $647 million in health care premiums. They also cite employees would feel relief too as we could expect to realize $213 million in reductions of our share being paid for health services. 

The question remains: what can Hoosiers do right now for their health care costs?

Right now, Hoosiers can start by taking better care of themselves and their families. We can do this by seeking out preventive care early. We can also work toward increasing education across the state about our health by being involved in health education initiatives. Another way that Hoosiers can put their health in their hands is to actively work to become healthy by eating healthy foods, being active, giving up bad habits like tobacco use, and working on taking medications as prescribed by providers.

HOPE Healthcare Services is here to help Hoosiers who lack health insurance of any kind.  We know that the high prices of healthcare and insurance can be a barrier to health and wellness for Hoosiers. Our wide range of low-cost healthcare services focus on providing care for those who are uninsured in our community and providing educational information related to health to all our neighbors. You can read more about our services here: https://www.myhopehealth.org/services/