Last month the state’s largest healthcare firm, IU Health, announced it would freeze prices through 2025. That end date is tentative, and the plan is short on public details. However, there has been enough reporting about the issue that we can begin to understand how financially important this is for businesses and consumers. It is also useful to interpret this decision in light of the overall hospital monopoly problem in Indiana.
IU Health has claimed that this price freeze will save Hoosiers about $1 billion over the five-year freeze from 2021 through 2025. This may be correct, but this not-for-profit hospital system earned $1.2 billion in profits in 2020. Numbers of this size seem almost abstract and difficult to assess without more context. By comparison, IU Health’s profit rate is four times higher than what Walmart has posted in any of the 52 years it is been a corporation. Last year, IU Health reported profits of more than $33,000 per employee.