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

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Confirmed Cases: 117450

Reported Deaths: 3580
CountyConfirmedDeaths
Marion21403766
Lake10618323
Elkhart6667111
St. Joseph6576110
Allen6292203
Hamilton4909109
Vanderburgh371931
Hendricks2747123
Monroe262736
Tippecanoe252313
Johnson2338124
Clark223657
Porter217647
Delaware198562
Cass19549
Vigo184327
Madison168975
LaPorte147441
Floyd138963
Warrick134440
Howard131863
Kosciusko124817
Bartholomew117957
Marshall101224
Dubois99119
Boone98646
Grant93334
Hancock93243
Noble92532
Henry80926
Jackson7689
Wayne76814
Morgan72938
Daviess67728
Shelby67729
Dearborn66528
LaGrange63911
Clinton60914
Harrison58724
Putnam58112
Gibson5305
Knox5259
Lawrence51529
Montgomery51121
DeKalb48711
White48614
Decatur45839
Miami4383
Greene42735
Fayette42313
Jasper3992
Steuben3877
Scott38111
Posey3400
Sullivan33812
Jennings31612
Franklin31125
Ripley3038
Clay3025
Orange28824
Whitley2796
Carroll27713
Adams2743
Wabash2718
Washington2691
Starke2677
Wells2654
Spencer2593
Jefferson2483
Huntington2453
Fulton2412
Tipton22822
Perry22113
Randolph2207
Jay1880
Newton17311
Owen1711
Martin1680
Pike1621
Rush1574
Vermillion1300
Fountain1282
Blackford1203
Pulaski1131
Crawford1080
Brown1043
Parke1032
Benton870
Ohio797
Union790
Switzerland690
Warren401
Unassigned0226

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 150809

Reported Deaths: 4741
CountyConfirmedDeaths
Franklin26961607
Cuyahoga17490656
Hamilton13191315
Montgomery7883163
Lucas7322364
Butler6040111
Summit5332252
Marion310347
Warren309649
Mahoning3073281
Stark2883175
Pickaway267844
Lorain231786
Delaware228120
Fairfield211853
Licking193663
Columbiana193280
Wood190272
Trumbull1896132
Clark181040
Clermont173123
Lake163851
Medina147539
Greene146533
Miami145451
Allen144169
Portage115566
Mercer113218
Erie94647
Tuscarawas93620
Wayne93668
Richland90319
Ross89024
Madison83012
Darke80442
Geauga72349
Belmont72227
Hancock71210
Athens7072
Ashtabula65948
Lawrence65922
Shelby64910
Auglaize6089
Putnam60823
Sandusky57720
Huron5517
Union5452
Scioto5117
Seneca48514
Ottawa46930
Preble44015
Muskingum4213
Holmes3909
Jefferson3364
Defiance32511
Henry31814
Logan3123
Champaign3083
Clinton29913
Perry2989
Brown2902
Knox28615
Jackson2636
Morrow2612
Washington26123
Hardin25613
Fulton2461
Crawford2446
Ashland2424
Coshocton23411
Fayette2326
Highland2303
Williams2133
Wyandot21312
Pike2000
Gallia19113
Meigs17610
Guernsey1708
Hocking1669
Carroll1527
Adams1354
Van Wert1233
Monroe11018
Paulding1100
Harrison643
Morgan490
Vinton473
Noble330
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