Guardian journalists show the harm of hospital’s high prices

Last fall, three reporters for the Guardian US showed how Parkview Health, the largest hospital system in Indiana, consolidated aggressively over more than 10 years and then steered patients into expensive care settings, secured high prices from health insurers and became the region's largest employer. The two-part series called "Too big to care " featured some of the best investigative articles of the year.

"'Too big to care' is a Guardian US investigation that examines how consolidation in the US health care system has saddled patients with big bills, fewer options and worse care," the newspaper explained.

The three reporters - George Joseph, Will Craft and Jessica Glenza - documented how the not-for-profit hospital system's concentration in Northeast Indiana and Northwest Ohio led to higher prices that harmed employers and consumers and burdened patients with medical debt. Joseph is an investigative journalist, Craft is a data editor on the investigations team and Glenza is a health reporter.

The first of the two Guardian articles, "'Unlimited dollars': how an Indiana hospital chain took over a region and jacked up prices," was published Oct. 17. Parkview Health is the largest employer in Fort Wayne, a small city with a population of 271,865.

For the second article, "Patients and employers accuse not-for-profit Indiana hospital of price gouging," published Oct. 24, Joseph quoted Indiana lawmakers and Fort Wayne residents who were critical of the hospital chain's high costs. "A chorus of employers, patients and political leaders in Indiana spoke out against Parkview Health," he wrote.

Big bills, fewer options, worse care

Coincidentally, the two Guardian US articles confirmed the findings in a report The Urban Institute published that same month, "Is Hospital Market Concentration Related to Medical Debt?" The institute's report and the "Too big to care" series show that reporting on hospital-market concentration is an important story worth pursuing wherever hospitals are concentrated. See this report from KFF, for example, "One or Two Health Systems Controlled the Entire Market for Inpatient Hospital Care in Nearly Half of Metropolitan Areas in 2022."

In interviews with AHCJ, Joseph and Craft said that over more than three months, they interviewed 40 current and former Parkview employees, patients, business leaders, lawmakers and competitors at other hospitals and reviewed hundreds of internal billing and policy documents and patients' bills. For the second article, they interviewed more than 11 sources.

"It's outrageous that a not-for-profit health care system like Parkview can leverage its market power to burden patients with inflated costs," Indiana state senator Shelli Yoder told Joseph. "Hoosiers deserve better than to be forced into medical debt just to get the care they need. Health care isn't a privilege for the few. It's a right for everyone."

Matt Bell, a lobbyist for Hoosiers for Affordable Healthcare, said the business group would urge lawmakers to curb consolidation and limit high prices. A second proposal would prohibit hospitals from requiring health insurers to restrain their ability to steer patients to certain providers, and a third would penalize nonprofit hospitals that charge commercial insurers 260% more than they charge Medicare for the same services.

'Squeezing the life out of local economies'

"Over more than a decade, Parkview Health has demanded that the people of northeastern Indiana and northwestern Ohio pay some of the highest prices of any hospital system in the country - despite being headquartered in Fort Wayne, Ind., which currently ranks as the No. 1 most affordable metro area to live in the United States," Joseph, Craft and Glenza wrote in the first article.

The high prices resulted from a campaign by hospital executives over 20 years to make Parkview Health the dominant hospital in Fort Wayne and "to squeeze revenue from a pool of patients and employers who feel they have no better alternatives," the reporters added. During this period, Parkview Health took over six former rival hospitals and built a network of almost 300 sites for its physicians and other providers.

Their analysis of what Parkview Health charges versus price data that hospitals submitted to the federal Centers for Medicare and Medicaid showed that over 10 of the past 13 years, Parkview hospitals were among the top 10% most expensive in the country - on average. Since 2019, Parkview Health generated annual revenue of more than $2 billion, they reported.

Extensive consolidation allowed Parkview Health to control referral flows by sending primary care patients to Parkview Health's costly specialists and facilities and boosted Parkview's leverage in negotiations with health insurers, Joseph, Craft and Glenza wrote.

Semi-rural areas such as Fort Wayne that have relatively few health care providers are vulnerable to consolidation, according to Yale economics professor Zack Cooper, Ph.D. "That's where you start to see these 10% to 15% price increases over time," Cooper said in the first article of the series. "But what we're starting to see is that many of our local health systems are boa constrictors just tightening around and squeezing the life of some of these local economies."

Secret negotiations drive up prices

Joseph advised other journalists to pursue similar stories. "The area of interest to me and the hardest to report on was the secret negotiations that insurers and hospitals engage in every couple of years when negotiating their contracts," he said. "That's a huge area that any local reporter could dig into because there's a paper trail. I got at that angle by reading bond documents and Moody's analyst reports."

Plus, Joseph added: "Those back-door negotiations decide prices for millions of people and employers, meaning it's a really important issue to people's lives."

While Joseph, Craft and Glenza were reporting on Parkview Health last year, RAND published the fifth in a series of reports about how much employers pay hospitals, as AHCJ reported here. At the time, Whitney Downard reported for the Indiana Capital Chroniclethat hospital prices in Indiana ranked 8th highest nationally.

In their article, the Guardian reporters included data from that RAND report showing that Parkview Health's prices were the highest in the state compared with what Medicare pays. Despite the RAND data, Joseph said there was little investigative reporting on Parkview Health. After the articles were published, Founder and Co-Chair of Arnold Ventures John Arnold commented on X (formerly Twitter) writing, "High health care costs act as a tax and make a state less competitive. Given broad consensus that consolidation is harming the state, and with incoming Gov. Mike Braun calling for reforms, there's a chance for substantive action next year."

And Arnold wrote, the articles were "a great example of the value of deeply reported, investigative journalism."

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