Today we release our newest study on Indiana’s hospital monopolies. This study focuses on the causes of healthcare expenditure differences, and uses data from CMS to evaluate monopoly pricing within the state. That study is here: projects.cberdata.org/169/do-indiana…
@matthewstoller
@matthewstoller
@matthewstoller First, we ran a healthcare expenditure model across all 50 states. We accounted for 20 different factors that measured health, access to care and demographic differences. We found that Hoosier residents pay $746 more, per person, than predicted, given these 20 factors.
@matthewstoller We then asked the simple question. How much more or less do Hoosiers spend than residents of states that do worse than us in these areas? This was shocking. Across all 20 categories, Hoosier spent more for healthcare than residents living in states with worse rankings. 
@matthewstoller For example, six states have higher smoking rates than does Indiana, yet residents of only one pay more in healthcare expenditures. There are thirteen states with higher obesity rates than us, yet residents in only two of those states pay higher healthcare costs than Hoosiers.
@matthewstoller This finding was so shocking, we did a second test, using data from the American Health Rankings. These is the ranking the hospital lobbyists quote when they argue our healthcare costs are so high. Guess what we found using these rankings?
@matthewstoller Yep, in each and every area, Hoosiers pay more for healthcare that residents of states that rank worse than us in these rankings. On average we pay between $612 and $1,392 more than places that do worse than us on these rankings
@matthewstoller From these results, it is clear that something else is going on in Indiana. Could it be monopoly pricing, as suggested by Rand, my work and others? To test this, we used publicly reported data on Indiana hospitals from the Federal Centers for Medicare and Medicaid Services.
@matthewstoller We calculated the Herfindahl-Hirschman Index, which is one of many measures of market concentration, or monopoly power of firms within a single market. Our market definition was the Affordable Care Act market regions.
@matthewstoller Now, it is worth noting, that Indiana is heavily concentrated. Even the study paid for by the hospital lobby to discredit my work admitted that 15 out of 17 market regions were “extremely concentrated” under the US Department of Justice Standards.
@matthewstoller So, what does that monopolization do to pricing within Indiana? Moving from the most competitive market, to median monopolized region raised the price of a night in the hospital by $719. Going from the median to the most monopolized raised the price a whopping $1,648 per night.
@matthewstoller So, yes, we have a real monopoly problem in Indiana’s hospitals. It is not going to self-correct. We need more vigorous anti-trust enforcement and broad legislative actions outlined in my last study.
