Why isn’t Indiana having more competition when it comes to healthcare and insurance companies?

Indiana has a few large networks of health care providers that generally serve the entire state. Various studies show This may be why medical costs are skyrocketing in Indiana. One listener wondered why there wasn’t more competition in Indiana.

Nir Menachemi is Executive Associate Dean of the Indiana University Fairbanks School of Health at IUPUI.

“I wouldn’t say lack of competition. I would say lack of enough competition,” he said.

Menachemi explained that the issue is not unique to Indiana. He said the issue was a “cat-and-cat game” between health insurers and provider organizations.

“We’re always trying to find ways to gain market dominance over the most valuable things in terms of how healthcare should be organized and how it should be paid,” he said. .

This can often bring providers together and “strengthen their ability” to negotiate with insurers for the best pricing, Menachemi said.

“Every year, every provider organization has to negotiate with every health insurance company that operates in that state. It’s about what the price will be,” he said.

He said that larger providers often make it easier to negotiate prices that benefit them.

Menachemi said there are also potential benefits to be gained from this integration.

“[Providers] It has the potential to provide better quality care and better coordination, making it a convenient one-stop-shop for patients,” he said.

He added that health insurance companies would also consolidate for similar reasons.

“Size is always a big advantage when negotiating with anyone,” he said.

Read more: Why is Indiana’s medical bills so high?

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But Menachemi said the system could lead to higher prices for consumers.

“The main issue people are complaining about is that as provider organizations get bigger and bigger, they are able to negotiate higher prices from health insurers that have to be renegotiated every year,” he said. I got

A RAND 4.0 study conducted by the non-profit public policy research organization showed some of these. high medical costs Hoosiers, especially for hospital care.

Menachemi explained that increasing competition, or reducing costs, is a multifaceted solution. Ultimately it comes down to balance.

“Some of the things that contribute to the checks and balances are not here,” he said. “And it’s not that anyone is wrong. It’s just that. So unless we address some of these issues, we’re not going to reintroduce some of these checks and balances into the system.” I think.”

There are many stakeholders in the process, including consumers and patients, hospitals, health insurers, pharmaceutical companies and employers who buy health insurance for companies, he said. He explained that cooperation between these parties is essential to ensuring a more balanced competitive system.

“I think if we put everyone in the room and somehow force them through policies and incentives or by threatening that someone else will solve this problem for everyone, we can get some traction. ” he said.

Not enough has been done to bring these stakeholders together to decide on these solutions, Menachemi said.

Contact reporter Violet at vcomberwilen@wfyi.org or follow her on Twitter: @ComberWilen.

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