A new report from the IU Richard M. Fairbanks School of Public Health outlined the factors impacting heath care costs in Indiana, including spending by industry, market characteristics and Hoosiers’ health conditions.
The report was commissioned by the Indiana Business Health Collaborative (IBHC), a coalition to address cost, access and quality of care in Indiana. The report compares 80 health measures for Indiana, the US and four midwestern states.
“While Indiana benefits from a strong economy, improving the health status of Hoosiers and lowering overall health care costs is essential for further economic prosperity,” said Luke Messer, IBHC chief executive. “This report is an important step in identifying our state-specific challenges and how we can address them.”
According to the report, Indiana’s total per-capita health care spending is in line with the national average and neighboring states. On average, Hoosiers spend 10.7% of their median income on health care, which ranks below the national average. The Indianapolis hospital market is slightly more competitive than the national average.
On average, 66% of Indiana’s private sector employees are enrolled in self-insured plans, which ranks 20% higher than the national average.
“Over the past few years, self-insurance has grown in Indiana, even while it has declined in the US and each of our neighboring states,” said Dr. Nir Menachemi, dean of the Fairbanks School of Public Health and co-author of the report. “Self-insured employers lack the market power to effectively negotiate prices, and studies show that self-insured plans pay higher prices for the same services. Addressing this market dynamic may result in lower prices.”
High-deductible health plans are also dominant in Indiana, with nearly 64% of employees enrolled, a 23% increase since 2020.
Indiana has a greater shortage of physicians in both general practice and specialty care. Indiana’s mortality rate is nearly 16% higher than the national average, led by an 81% increase in drug deaths since 2020.
“The prevalence of high-deductible health plans may partially explain patients’ higher out-of-pocket costs in Indiana, despite our overall average ranking in health care spending,” Menachemi said.
Maternal mortality has declined 38% and infant mortality by 2% since 2020. Authors of the report attribute the improvement to the state’s efforts to expand coverage in these areas. The state’s recent $225 million public health investment is projected to improve overall health outcomes.
For more information about IBHC, visit IndianaBHC.org.
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This reporting is made possible by a grant from the Indianapolis African-American Quality of Life Initiative, empowering our community with essential health insights. https://iaaqli.org/
Contact Health & Environmental Reporter Hanna Rauworth at 317-762-7854 or follow her on Instagram at @hanna.rauworth.
