'Anywhere but Indiana' — Why employers are avoiding hospitals in the Hoosier State

Indiana's high hospital prices may be deterring new businesses from the state, according to the Indy Star.

Gloria Sachdev, PharmD, the president and CEO of Employers' Forum of Indiana, a coalition aimed at improving what employers spend on healthcare, heard about how Indiana's hospital prices are affecting outside employers while speaking with executives from Michigan's auto industry.

During the discussion, one executive said, "We have plants all over the country, and whenever we're talking about opening a new one, do you know what I say? I say, 'ABI,'" according to the Indy Star. The executive elaborated: "Anywhere but Indiana. On average we pay $2,200 for every worker's emergency room visit in Indiana. In Michigan it's $800. The difference there is the profit margin on one car."

For Ms. Sachdev, the executive's comment confirmed what other employers have said about Indiana's healthcare costs. A recent study led by Chapin White, PhD, adjunct senior policy researcher and faculty member at Frederick S. Pardee RAND Graduate School in Santa Monica, Calif., found what employers pay for healthcare in Indiana is much higher than what Medicare pays. For example, employers paid 277 percent of what Medicare paid for healthcare in 2015, on average. Just two years later, that percentage rose to 295 percent.

While Hoosiers' cost of living is relatively low compared to other states, several factors may contribute to Indiana's high healthcare costs, according to the Indy Star. For instance, Indiana often scores poorly on health metrics like smoking rates and obesity, which can lead to higher healthcare use and drive up costs. Another reason may be that Indiana residents and employers prefer open provider networks as opposed to narrow networks that can negotiate lower hospital prices. Still, others, like Ms. Sachdev, argue hospital prices are to blame for the state's high healthcare costs.

For the full Indy Star report, click here.

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