Hospital profits in Indianapolis were high, study finds. Why that's not good for us
Hospitals in central Indiana enjoy a higher profit margin than those elsewhere because they overcharge insurers, which results in employers and consumers paying more for care than they should, a recent study concludes.
The study, published last month in the International Journal of Health Economics and Management, used a publicly available database to calculate margins for the four major non-profit hospital systems in Indiana. Each one had margins higher than 10 percent, with Franciscan Health showing the highest, a 20 percent margin, according to the study.
From 2013 to 2017, three of these hospital systems – Franciscan Health, IU Health and St. Vincent – together made nearly $8 billion, a 23 percent margin, said Michael Siebold, the study’s author, a healthcare consultant based in Tucson.
By contrast, most other non-profit hospitals in the United States operate at a 2 to 3 percent profit margin, Siebold said. Because one insurer, Anthem, has 70 percent of the market share of health insurance plans in Indiana, one might expect it to control prices better, he added.
Read more: https://www.indystar.com/story/news/2018/10/05/hospitals-here-have-higher-profit-margins-than-elsewhere-study-finds/1519851002/