IU Health offers a six-page response to a request from Indiana legislative leaders asking state hospital systems to provide a plan to reduce prices. IU commits to achieving national average commercial pricing by January 1, 2025 (stepping up from its previously stated goal of December 2025) with full accountability and price transparency. IU Health plans to shift to organizing a healthcare system around value and away from today’s Fee-For-Service model, in which providers are generally paid based on the volume of care they provide to patients.

IU Health also recognizes reality in shifting some of the blame for high health care costs to the fact that spending on public health in Indiana ranks among the worst in the nation (47th out of 50 states) and the system calls on legislative leaders to bring Indiana’s public health care spending to the national averages as IU Health is doing with its prices. As IU Health execs note, “we simply cannot ignore that Indiana’s poor public health indicators are a contributing factor to the state’s overall health care costs,” and “we would be remiss not to draw attention to the fact that Indiana’s woeful investment in public health relative to national benchmarks only exacerbates the cost of care when the population seeking care is in poorer health than the rest of the nation.”

IU Health is even more direct in its conclusion, reminding legislative leaders, “you have the capability to invest in Hoosier health by investing more in public health. As previously discussed, Indiana’s public health spending is among the worst in the nation, and research shows there is a clear correlation between this state’s investment in public health and our abysmal public health metrics. You have asked us directly ‘What can the state do to help reduce the cost of care in Indiana?’ We would request that you bring Indiana’s public health care spending to the national averages as we are doing with our prices,” and they outline one option to help: “[O]ver the last several budget cycles, hospitals and healthcare advocates have argued for an increase in the cigarette tax only to see this initiative fail year after year. We know that in Indiana healthcare costs attributable to smoking were estimated to be $3.3 billion, with the state’s Medicaid program incurring approximately $540 million of that cost. And, as a healthcare provider, we saw all too often the impacts of COVID on the mortality of those Hoosiers who smoke. As we continue to do our part to rein in the growth of healthcare costs, we are asking you to meet us halfway in this effort by investing more in Hoosier public health, including exercising your authority to increase the cigarette tax at a meaningful amount to curb tobacco use. The revenues from this tax could support much needed public health expenditures to right-size Indiana’s investment in public health.”