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The Guardian - US
The Guardian - US
World
George Joseph

Patients and employers accuse not-for-profit Indiana hospital of price gouging

The exterior of Parkview Regional Medical Center
Parkview Regional Medical Center in Fort Wayne, Indiana. Photograph: Rachel Von Art/The Guardian

Last fall, Doug Allen, the president of a plastic molding firm in Brimfield, Indiana, was forced into a difficult decision.

Since 2007, the costs of his employees’ health insurance had shot up around 275%, expenditures that were eating into his profit margins and far outpacing the rate of inflation, according to his records. But Allen didn’t blame his small local insurer.

When his employees needed medical care, they usually turned to Parkview Health, a hospital chain that had swallowed up many of the once independent doctors’ offices and hospitals in his stretch of north-eastern Indiana. With this growing market power, the Fort Wayne-based system had pushed health insurance companies to agree to some of the highest hospital prices in the country– increases which Allen felt were routinely being dumped onto him.

So last year, the small business owner stopped offering his employees health insurance altogether.

Allen gave them a raise so they could buy coverage through the US Affordable Care Act’s government-regulated insurance exchange. Their new insurance is not as good, he admitted, but he said he couldn’t find a cheaper option. Healthcare plans that work for his employees, he said, now effectively have to include Parkview facilities.

“We are pretty much held hostage by where we can go,” Allen said of Parkview’s regional constellation of hospitals and affiliated doctors’ offices. “There’s only one supplier in the whole area.”

The small business owner is one of a chorus of employers, patients and political leaders in Indiana speaking out against Parkview Health in the wake of a Guardian investigation released last week that documented how the chain’s aggressive consolidation had helped it to steer patients into expensive care options, secure high prices from insurance companies in negotiations behind closed doors and become the region’s largest employer.

Parkview’s growth is an example of a larger phenomenon of hospital consolidation in recent decades. Academics have consistently found that when hospitals merge, they drive up prices. And emerging research suggests that these high prices may be choking the potential of other businesses, forcing local employers to cut back on payroll and staffing.

Parkview did not respond to requests for comment for this story. In past statements, Parkview has defended its high prices by pointing to the discounted and free care it offers across north-eastern Indiana and north-western Ohio – which as a not-for-profit it is required to provide.

Lawmakers call for reforms

In response to the Guardian’s investigation into the hospital chain, several Republican and Democratic leaders in Indiana criticized the system, with some vowing to push for legislation that could curb its high costs and future attempts at expansion.

“The Guardian’s piece on Parkview Health highlighted many egregious problems within the healthcare industry that have rightly angered patients,” said Republican state senator Chris Garten, Indiana’s senate floor majority leader. “Indiana lawmakers have been listening to Hoosiers’ justified frustration by passing innovative policies to make healthcare more accessible and affordable, but we have not yet solved this complex set of overlapping problems … I fully expect this to be a subject my colleagues and I will continue to address in the 2025 legislative session and beyond.”

“It’s outrageous that a not-for-profit healthcare system like Parkview can leverage its market power to burden patients with inflated costs,” said the Democratic Indiana state senator Shelli Yoder, assistant minority leader and a standing member of the senate health and provider services committee. “Hoosiers deserve better than to be forced into medical debt just to get the care they need. Healthcare isn’t a privilege for the few – it’s a right for everyone.”

The investigation has also drawn interest from candidates in the state’s race for governor.

In a statement, Jennifer McCormick, the Democratic nominee and the former head of the state’s public school system, called the Guardian’s findings about Parkview’s practices “disappointing and unsurprising” and vowed to hold large hospital chains accountable “when they price gouge Hoosiers for essential care and services”.

US Senator Mike Braun, the Republican candidate for governor, did not issue a statement to the Guardian, but called out the hospital on Monday, after facing questions about the story from a local radio station.

“We here in Indiana have some of the highest healthcare costs in the country. Parkview is probably right up there at the top of the big five systems,” Braun told News Talk WOWO, a station based in north-eastern Indiana.

Matt Bell, a lobbyist and a leader of a business aligned group called Hoosiers for Affordable Healthcare, says his team is planning to push lawmakers to pass several bills in 2025 that could curb consolidation and high prices from big Indiana hospital systems like Parkview.

One proposal would give the state attorney general the power to block healthcare industry mergers. Another would prohibit hospitals from requiring health insurers to accept limits on their ability to steer patients to the most cost-effective providers. A third measure would penalize not-for-profit hospitals that charge commercial insurers 260% more than they charge for the same services under Medicare.

The Republican state senator Andy Zay said that while he was not comfortable with price caps, lawmakers should consider reforms that would enable the attorney general to block efforts at healthcare consolidation that undermine competition. “I think we need to look at giving the AG authority to have some oversight,” he said.

Liz Brown, a Republican state senator from the Fort Wayne area who has close ties to Parkview, did not respond to a request for comment.

On its website, Parkview says, “Our mission is: ‘do good’ and serve the community, not private investors. Every person we serve receives the same high level of care, regardless of your insurance plan or ability to pay.”

Parkview officials have also said that the not-for-profit focuses on “delivering the best care at the best cost, as we know it’s what our region’s patients and employers expect and deserve”.

High costs affect businesses and families

John Wicker, who like Allen runs a manufacturing business in rural Noble county, Indiana, told the Guardian that Parkview’s “monopoly” is “absolutely destroying” his company’s profitability.

Wicker estimated that health insurance costs for the 94 employees at his tool and dye factories have gone up 300% since 2010.

The employer said his company is currently eking by with a 4% profit margin after falling into the red last year.

“We’ve got a good plan but our cost is astronomical,” said Wicker, referring to his staff’s insurance coverage. “You’ve gotta be competitive, and the market will only bear so much cost.”

After the Guardian’s investigation last week, dozens of Indiana residents also complained of big hospital bills on social media and reached out to the Guardian to share their stories, which they say call into question Parkview’s not-for-profit bona fides.

One of those residents was Jayme Miller, a mother of two from Grant county, Indiana, who is struggling with thousands of dollars in medical debt because of charges from Parkview.

One morning in April, Miller noticed that her four-year-old daughter Addy wasn’t acting like her normal “rambunctious” self. Addy was struggling to hold down fluids, couldn’t stay awake, and was peeing infrequently. Miller and her husband took her to their local Parkview hospital.

The medical team there struggled to give Addy, who weighs less than 40 lbs, fluids and to draw blood from her, so they transferred her to a pediatric speciality unit at Parkview’s flagship regional medical center. Eventually, a pediatric specialist delivered some good news. Addy had parvovirus, an infection which was not life-threatening. They just had to wait it out.

After Addy was able to keep down a few sips of apple juice and a few bites of a pancake, her mother recalled, the hospital discharged her.

Miller appreciated the medical team’s work, but being a nurse herself for a private surgeon, she considered their labor to be fairly routine. They had checked Addy’s vital signs, pumped her with fluids, evaluated her, and given her nausea medication, she said. When she got a bill from Parkview asking her family to pay more than $6,000 after insurance, she was shocked.

The sum seemed excessive to Miller and her husband, who are both nurses. Miller poured over the codes in her explanation of benefits records and compared each code’s cost with how much it would have been charged under Medicare. She found that the bill Parkview sent to her private insurer was thousands of dollars higher.

Parkview did not respond to questions about Miller’s analysis.

Rebecca Knapp, director of analytics at ClaimInformatics, a healthcare analytics firm, reviewed Miller’s paperwork at the request of the Guardian and confirmed that a Medicare payment for Miller’s claim would have been thousands of dollars less.

After Miller ran the numbers, she asked Parkview if they would help her family by charging them at or closer to the Medicare rate. The hospital refused, she said, arguing that her family’s income was too high. Miller said this claim left out the fact that she and her husband had taken out an early retirement distribution in order to pay a previous medical debt.

Instead of taking this financial reality into account, she said, the not-for-profit put them on a four-year payment plan.

“I don’t mind paying my medical bills. That’s not what this is about,” said Miller. “I want them to get paid for what they’ve done, but the catastrophic hit that we’re taking because of the amount this bill was is what’s so frustrating.”

After Addy’s hospital visit, Miller and her husband stopped saving for their retirement and stopped putting money into their kids’ college fund so they could pay the not-for-profit.

But Miller fears even these cutbacks may not be sufficient. In July, her husband, an otherwise healthy 33-year-old, doubled over in their living room while playing with their kids. Miller’s husband went back to their local Parkview hospital. The medical team ran a CT scan on his chest, found he had a pulmonary embolism in his lung and held him overnight.

Miller hasn’t gotten the final bill after insurance payments for that visit yet, but, based on the explanation of benefits statement, she fears it may be even bigger than the charge she incurred for their daughter’s hospitalization.

As of now, Miller said, her family doesn’t have a plan for how they’re going to come up with the money for the not-for-profit hospital.

“I don’t know that we have one yet,” she said. The family, she said, is “flying by the seat of our pants, trying to make A work to B work to C”.

  • Jules Feeney and Marina Dunbar contributed reporting

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