The multi-year plan is expected to achieve more than $1 billion in savings for consumers after factoring in inflation, as the Indianapolis-based health system adjusts its prices to national parity.
“Our affordability plan aims to reduce costs while improving efficiency,” IU Health CFO Jenni Alvey said on the Becker’s podcast. “We’ve held prices flat across services and payers, working toward the national average. This commitment lets us redirect savings to benefit patients and employers.”
Despite recent inflationary and financial pressures, IU Health has reduced prices by more than 15 percentage points as a percentage of Medicare, according to Ms. Alvey, who has served as CFO of the health system since 2016.
“It’s a five-year commitment, and we’ve delivered on promises to our legislature and community,” she said. “We are proud of this progress, but there’s more to do as we approach 2025.”
IU Health shared its affordability plan with state regulators in 2022 to lower its prices in an effort to bring Indiana’s healthcare costs down to the national average.
“This is a carefully crafted plan that seeks to balance our desire to reduce costs with our ability to continue to provide healthcare services to all patients regardless of ability to pay,” Ms. Alvey said. “This plan also seeks to ensure we continue to reinvest in our team members, facilities and support structures to provide the best individualized care to patients.”
The plan follows a fiscally responsible approach to addressing patient care cost through three elements: affordability, value-based care and public health investment.
The pricing plan has benefited hundreds of thousands of patients through focused reductions in prices in radiology, labs, specialty pharmacy and ambulance services, according to the health system. IU Health also assists patients with a price transparency program that offers comprehensive estimates, including out-of-pocket costs, for all medical procedures. The service provides more than 150,000 estimates a year.
Patients also benefit from consolidated billing statements, zero-interest payment plans and flexible payment arrangements.
“We have achieved significant price reductions in services used most frequently by our patients,” President and CEO Dennis Murphy said in a recent news release. “Nevertheless, we still have work to do. We must navigate a careful and delicate balance between our care affordability plan and the rapidly changing dynamics of our environment.”
IU Health is also expanding in several areas such as Fort Wayne, Fishers and downtown Indianapolis. The system is investing $4.39 billion in Indianapolis Medical Center, focusing on destination programs like cancer, neurosciences and cardiovascular care. It is also implementing a new Epic EHR and advancing various AI initiatives.
“We will be pressuring our balance sheet over the next couple of years, but we built our balance sheet for this, so we can deliver on our 10 year plan,” Ms. Alvey said. “I can’t wait to see what happens in 2028 when we’ve got all of those plans in place.”
