Transparency and Accountability: The Path to Meaningful Healthcare Pricing Reform

Ashton Eller, IMA Vice President of Governmental Affairs

As the voice of Indiana manufacturers, the Indiana Manufacturers Association (IMA) strongly supports House Bill 1004 and urges the Indiana Senate to swiftly pass this crucial legislation. Our members are deeply concerned about the escalating cost of healthcare, particularly hospital prices, which place Indiana businesses at a significant competitive disadvantage.

The Employer Price Transparency Study – Round 5, conducted by RAND, has consistently shown that Indiana's hospital prices are among the highest in the nation, ranking 8th overall. Hoosier employers and employees are paying nearly three times what Medicare pays for the exact same services at the same hospitals – an average of 297% compared to the national average of 254%. This alarming statistic demonstrates a clear need for reform.

These inflated hospital costs have a direct and negative impact on Indiana’s manufacturing sector. Every dollar spent on excessive healthcare charges is a dollar that cannot be invested in workforce development, technological advancements, or business expansion.

In a global marketplace, our ability to compete hinges on our efficiency and our ability to attract and retain a skilled workforce. The current high cost of healthcare in Indiana makes it more difficult for manufacturers to offer competitive benefits packages and to allocate resources strategically for future growth.

Since self-funded employers pay directly for their employees' healthcare claims, escalating hospital prices translate to immediate and substantial increases in their expenditures. These rising costs force employers to allocate more resources to healthcare, potentially diverting funds from other critical business areas. Ultimately, the financial burden of high hospital prices significantly affects the sustainability and competitiveness of all employers, but most acutely self-funded insurance models.

HB 1004 takes meaningful steps towards addressing this issue. It introduces measures to increase transparency in hospital pricing and to put pressure on exorbitant costs. For instance, the bill establishes a hospital facility fee excise tax for charges exceeding 265% of Medicare facility fees.

Under this legislation, nonprofit hospitals would be mandated to report aggregate data on billed services and their comparison to Medicare reimbursement rates. Nonprofit hospitals charging more than 300% of their modified Medicare reimbursement rate could forfeit their nonprofit status. These provisions are critical for bringing much-needed transparency and accountability to our healthcare system.

The passage of HB 1004 is not just about lowering healthcare costs; it is about strengthening Indiana’s economy and ensuring a prosperous future for our manufacturing industry and its employees. By addressing the issue of high hospital prices, we can free up valuable resources that can be reinvested in our workforce, making Indiana a more attractive place to do business and create jobs.

The IMA urges all Hoosiers to contact their state senators immediately and express their strong support for HB 1004. Let your elected officials know that you believe it is time to bring transparency and affordability to Indiana’s healthcare market.