By State Sen. Travis Holdman (R-Markle)
In 2019, a study from the RAND Corporation confirmed what many Hoosiers already knew too well – health care prices in Indiana are too high. This study found we had the highest relative hospital prices among 25 states they studied. A 2020 follow-up report that looked at prices nationwide found Indiana was sixth highest.
A review of not-for-profit hospitals' 2020 audited financial statements shows some of these hospitals' assets tally in the billions of dollars and grew by hundreds of millions of dollars even amidst a once-in-a-lifetime pandemic. In a year where hospitals were ordered to suspend elective surgeries, which hospitals warned could leave them in dire straits financially, many not-for-profit hospitals' assets grew leaps and bounds.
Take for example Franciscan Health, which is sitting on nearly $4 billion in assets and whose assets increased by $291 million over the last year. Or Community Health Network, which is sitting on $2.1 billion in assets that grew by $178 million. Parkview Health, up in my part of the state, is also sitting on $2.1 billion in assets and saw $186 million in increased assets.
Notably, IU Health, which is the state's largest physicians' network, has $9.4 billion in assets that grew by $1.3 billion during 2020. That includes $740 million in investment income alone.
A review of hospital operational days demonstrates that hospital systems operating in Indiana have anywhere between 267 and 516 unrestricted asset operational days.
At the same time these hospitals are seeing such astronomical asset growth, employers are expecting a 5% increase in health care premiums nationwide.
It begs the question of what these "not-for-profit" hospitals are doing with all this money. Are they truly benefitting the community? Why are these dollars not being invested back here in the Hoosier state? With such high levels of assets, why aren't hospitals cutting fees and charges to benefit Hoosiers?
As a state lawmaker, I understand and support the fiscally responsible decision to keep some rainy day funds on hand in case things take a turn for the worse. This is a sound policy for business, families and government. However, one has to wonder, with these high balances and the amount of unrestricted operational days, whether our not-for-profit hospitals are hoarding cash rather than maintaining an emergency reserve. If not-for-profit hospitals aren't willing to use their tax-exempt status for the benefit of our communities, public policy on this matter can always be changed.
In recent sessions, lawmakers have started tackling Indiana's high health care prices by enacting legislation that improves transparency in pricing. Transparency is a good start, but high health care prices are still a concern for many Hoosiers. There's no silver bullet that will wholly address this issue, but Hoosiers should rest assured that in the General Assembly we continue to look for ways that our state's laws can help address high health care prices and transparency.