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Study: Indiana may have a monopoly problem for healthcare services

Hospitals and network providers for healthcare in Indiana exhibit broad signs of monopolization, causing Hoosiers to pay significantly more than the national average, says a new report from Ball State University.

Posted: Sep 30, 2019 1:14 PM
Updated: Sep 30, 2019 2:51 PM

MUNCIE, Ind. (WFFT) – Hospitals and network providers for healthcare in Indiana exhibit broad signs of monopolization, causing Hoosiers to pay significantly more than the national average, says a new report from Ball State University.

“Indiana has a Monopoly Problem in Healthcare; Preliminary evidence and recommendations,” a report released today by Ball State’s Center for Business and Economic Research (CBER), found that blames the state allowing healthcare organizations to enjoy not-for profit status and the recent merger trend.

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The research found that in markets where choices are restricted through mergers or hospital exits, there is consistent, high quality evidence that prices are higher.

“As a result, consumers are paying much higher prices,” said Michael Hicks, CBER director and the George and Frances Ball Distinguished Professor of Economics. “In just 20 years, healthcare expenditures for Hoosiers have risen from $330 per person beneath the national average, to more than $819 per person more than the national average.”

He noted there is increasing evidence that network mergers of hospitals across multiple markets also leads to higher prices.

These studies identify price increases in the 10 percent of 17 percent range across markets in the wake of cross-market mergers. Indiana has faced significant network mergers in the past two decades.

The research also found that that households in the most concentrated healthcare markets pay more than double the price per procedure than in those in markets that face the most competition.

“This lack of competition seems most acute not in rural places, but in metropolitan markets,” he said. “For example, Fort Wayne, South Bend, Evansville and other relatively metropolitan places face more concentrated markets than do places that are more rural. One clear implication of this fact is that market power, not provider cost is a central factor in pricing differences.”

Hicks also noted that in 2017, the most recent year for which there is data, Indiana’s not-for-profit hospitals earned more than $1.49 billion in profits.

Hicks noted his research found monopolization is a significant economic and policy problem in Indiana.

To address it he recommends significant research, and three broad policy proposals:

• Restore competition to not-for-profit hospital and healthcare markets by taking a number of steps from anti-trust enforcement, ending certificate of need and local non-compete clauses, and consider broad legislation requiring breaking up hospitals and networks of these markets.
• Tax not-for-profit healthcare provides who earn accrued profits at rates consistent with private sector firms(Healthcare Assessment Fee extended to investment holdings, additional corporate, sales and property taxes).

• Impose significant taxes and restrictions on the more than $27.7 billion in accrued profits held by Indiana’s not-for-profit hospitals.

Hicks points out that the degree of monopolization of Indiana’s healthcare providers is significant, has already weakened the state’s economy and appears to be worsening.

“These three big remedies are designed to return Indiana’s healthcare markets to a degree of workable competition,” he said. “This would reduce the price of healthcare services, increase access to healthcare services and establish a better economic environment for Indiana families and businesses. Inherent in this is the need to treat not-for-profit and for-profit firms equally under law and taxation.

“The not-for-profit market conditions in Indiana have failed to sustain competition, and must be incentivized to refrain from anti-competitive practices. These recommendations are not harsh, but instead return this market to a level of competition previously observed in the state, and which is implicit in Indiana code.”

You can read the full report here.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 726600

Reported Deaths: 13379
CountyCasesDeaths
Marion992781737
Lake53359964
Allen40387675
St. Joseph35449550
Hamilton35440408
Elkhart28376439
Tippecanoe22336217
Vanderburgh22271396
Porter18637306
Johnson17876377
Hendricks17154314
Clark12919191
Madison12574339
Vigo12426245
Monroe11845169
LaPorte11773210
Delaware10615185
Howard9859215
Kosciusko9366117
Hancock8239140
Bartholomew8042155
Warrick7766155
Floyd7645177
Grant7019174
Wayne7018199
Boone6669101
Morgan6547139
Dubois6148117
Marshall6000111
Dearborn578577
Cass5780105
Henry5681102
Noble558283
Jackson500472
Shelby489496
Lawrence4492120
Gibson434391
Harrison434271
Clinton426853
DeKalb425284
Montgomery423388
Whitley394439
Huntington387480
Steuben382957
Miami380266
Knox371890
Jasper362747
Putnam358560
Wabash353178
Adams340654
Ripley338970
Jefferson328881
White312854
Daviess295899
Wells290481
Decatur283592
Fayette278662
Greene276685
Posey270933
LaGrange264770
Scott264753
Clay259245
Randolph239781
Washington239532
Spencer231331
Jennings229248
Starke214452
Fountain211946
Sullivan211042
Owen197056
Fulton194640
Jay191830
Carroll188120
Perry182637
Orange182454
Rush172925
Vermillion168343
Franklin167735
Tipton162345
Parke145916
Blackford134532
Pike133034
Pulaski116045
Newton107034
Brown101541
Crawford99114
Benton98414
Martin87815
Warren81415
Switzerland7848
Union70710
Ohio56211
Unassigned0413

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1080121

Reported Deaths: 19344
CountyCasesDeaths
Franklin1254981392
Cuyahoga1115202107
Hamilton798171200
Montgomery512711012
Summit46997933
Lucas41982782
Butler38273580
Stark32190907
Lorain24910480
Warren24249297
Mahoning21474586
Lake20586368
Clermont19727238
Delaware18496131
Licking16396210
Fairfield16144199
Trumbull15996466
Medina15233262
Greene15027244
Clark13960297
Wood13056188
Portage12806201
Allen11609231
Richland11308198
Miami10659215
Muskingum8795132
Wayne8777210
Columbiana8756229
Pickaway8547121
Marion8511135
Tuscarawas8467243
Erie7859154
Hancock6900126
Ross6835152
Ashtabula6777169
Geauga6665148
Scioto6398101
Belmont5856167
Union570047
Lawrence5542102
Jefferson5511151
Huron5422119
Darke5344122
Sandusky5330120
Seneca5268121
Athens518258
Washington5148109
Auglaize488484
Mercer480185
Shelby468593
Knox4479110
Madison435461
Putnam4268100
Ashland421289
Fulton420969
Defiance418997
Crawford3965106
Brown392957
Logan381176
Preble379098
Clinton370561
Ottawa366279
Highland353861
Williams338075
Champaign330458
Guernsey315453
Jackson312051
Perry294550
Morrow283839
Fayette281449
Hardin270364
Henry268166
Coshocton264258
Holmes2590101
Van Wert242863
Pike237433
Adams237052
Gallia235048
Wyandot230654
Hocking215162
Carroll191247
Paulding172440
Meigs144639
Noble133337
Monroe131942
Morgan108323
Harrison107537
Vinton82415
Unassigned02
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A cold start Saturday with widespread frost expected. We'll see plenty of sunshine for most of the day. Then, clouds build in during the late afternoon and evening.
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