I-Team 8

IU Health announces local health investment; consumer advocate skeptical

INDIANAPOLIS (WISH) — An Indianapolis health care consumer advocate on Friday said Indiana University Health’s investment decisions could undercut efforts to lower prices.

On Friday, IU Health announced it would invest $1 billion in various community health initiatives. Half of the sum will go toward health-related community development in the area around the main IU Health campus in Indianapolis. Another $400 million will cover innovation related to its key priorities, and $100 million will go to the IU Health Community Impact Investment Fund.

Officials did not provide further details about how they would spend the money.

Past expenses have included funding Ivy Tech Community College’s expansion of its nursing program and a health sciences education fellowship at Crispus Attucks High School.

Hoosiers for Affordable Health Care’s Al Hubbard, a former White House economic adviser, said he was disappointed by the announcement. He said IU Health’s goals are laudable but the money would be better spent reducing prices.

“It’s not IU Health’s responsibility to take care of other things outside of the health sphere and their patients,” he said. “Their role is to provide health care and hospital care. Let the people keep their money and the people can decide where to invest that extra money.

A 2020 RAND Corp, study found IU Health charged insurers 2.28 times the Medicare rate, on average, for inpatient services. The statewide average was 2.17. For outpatient services, IU charged even more, 3.82 times the Medicare rate. The statewide average was a still-high 3.58 times Medicare.

In January, House Speaker Todd Huston and Senate President Pro Tem Rodric Bray sent a letter to Indiana’s nonprofit hospitals, including IU Health, asking each of them to submit plans to reduce prices to the nationwide average by 2025. The lawmakers set a deadline of April 1.

IU Health has already implemented a price freeze as part of its efforts to reduce prices. Hubbard said he fears the initiatives announced on Friday could undercut those efforts.

In Friday’s announcement, Dennis Murphy, IU Health president and chief executive officer, said the organization’s community investments would lead to lower costs and improved communities. He said the state will have to address variables beyond doctors’ control to help hospitals bring prices down.

“We will also need to focus on the other drivers of health care costs — such as lower public health funding and cigarette taxes, utilization rates of health care services, insurance costs — if we are serious about controlling healthcare costs in Indiana,” he said.

IU Health turned down a request from I-Team 8 for further comment.