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2014 MARKET OVERVIEW

Indianapolis

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Published: June 2014


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INDIANAPOLIS MARKET OVERVIEW

Indianapolis
Counties Covered:
Boone, Brown, Hamilton, Hancock, Hendricks,
Johnson, Madison, Marion, Morgan, Putnam, and
Shelby

Key Cities Covered: Anderson, Carmel, and Indianapolis


Population: 1,953,961
Report sections updated in June 2014:
This report includes news and analysis updates to
the following sections: Health Systems and Hospitals,
Physicians, Health Plans, Medicaid, Legislation, and
Employers.

Contents
3 Updates: Key Market Events
5 Executive Summary
6 Indianapolis Market
11 Health Systems and Hospitals
25 Physicians

HealthLeaders-InterStudy Staff
Indianapolis Analyst

AnnJeanette
Colwell
support@hl-isy.com

31 Health Plans
38 Medicaid/Medicare/Uninsured
40 Pharmacy
42 Legislation
43 Employers
Market Analyst
AnnJeanette Colwell

Sales Vice President


Paul Holloway

Market Access Insight Products Vice President


Carolyn McMeekin

Key Account Directors


Matt Hanvey, Jolayne Perry,
Bob Fucile

Market Access Insight Products Director


Rene Burnham
Market Access Regional Insights Director
Josh Kelley
Senior Manager
Holly Fults
Content/Editorial Advisers
Taylor Holliday and Keith Wagner

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Except where otherwise indicated, information in this product is from analysis of HealthLeaders-InterStudy data, interviews with local experts, news sites, and industry reports.
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2014 Market Overview

CITY: INDIANAPOLIS

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Updates: Key Market Events


June 2014 - Accountable Care Consortium dissolves
The Accountable Care Consortium, a partnership among St. Vincent Health, Community Health Network,
and Suburban Health Organization, is being dissolved. The joint venture, formed in October 2012, was
expected to have significant clout in Indianapolis since the participating physicians and health systems
had a network that was second in size only to IU Health. The ACC contracted directly with employers for
its narrow network product and agreed to be financially accountable for the health of those employees.
However, the participating health systems found that the changes required by healthcare reform were too
daunting to complete as a combined organization. See the Health Systems and Hospitals section of this
report for more information.

June 2014 - Health system partnership rescinded


The partnership between Community Health Network and Eskenazi Health, announced in 2013, has been
called off. The joint operating agreement would have created a primary-care behemoth in the market and
would have integrated the regions safety-net hospital with one of the largest health systems. The systems said
that the legal and financial hurdles of the deal outweighed the advantages of the integration. See the Health
Systems and Hospitals section of this report for more information.

Updated

June 2014 - Indiana seeks Medicaid expansion alternative


Gov. Mike Pence has proposed a Medicaid expansion alternative that would allow Indiana to use federal
Medicaid funds to enroll residents in a program known as Healthy Indiana Plan 2.0. Pending federal
approval, HIP 2.0 would replace traditional Medicaid in Indiana for all nondisabled adults. HIP 2.0 would
provide three coverage options: one that provides premium assistance to residents who have access to
employer-provided insurance but cannot afford it, one that is similar to the states existing Healthy Indiana
Plan but without the required premium contributions, and one that requires monthly contributions to
a health savings account and includes dental and vision coverage. The proposal would benefit Indiana
hospitals because the number of uninsured residents would significantly decrease and require less
uncompensated care. The proposal would also likely increase medical and prescription drug utilization.
The plan options include various levels of prescription drug benefits. See the Medicaid/Medicare/Uninsured
section of this report for more information.

June 2014 - HealthLeaders-InterStudy publishes data update


This update provides new HealthLeaders-InterStudy enrollment and pharmacy data for health plans in the
Indianapolis market, including new information on commercial plans, Medicaid, Medicare, and the uninsured.

January 2014 - Health insurance exchange in Indianapolis offers only two carriers,
narrow networks
Only two carriers, WellPoint (Anthem Blue Cross and Blue Shield) and MDWise, are offering plans on the
states federally administered health insurance exchange in Indianapolis, and the insurers have limited their
networks of providers. This is a significant deviation for the market, since Indianapolis consumers have been
wary of narrow networks that restrict their choice of providers, and managed care organizations have touted
their broad networks. WellPoint, which is based in Indianapolis, has excluded several of the largest health

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CITY: INDIANAPOLIS

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systems from its exchange network, including IU Health, St. Vincent Health, and Franciscan St. Francis
Health. MDWise, which is part-owned by IU Health, is a managed Medicaid plan, so its plan offerings on
the exchange are its first foray into the commercial market. In December 2013, MDWise received permission
from the Centers for Medicare & Medicaid Services to expand the number of counties in which it competes
on Indianas exchange, so the carrier could provide increased competition for Anthem statewide. See the
Health Plans section of this report for more information.

January 2014 - Franciscan St. Francis Healths Pioneer ACO saves $13.3 million in
first year
Franciscan St. Francis Health announced that its Pioneer ACO achieved $13.3 million in cost savings in 2012,
which is significant since nine other Pioneer ACOs left the program in 2013. The ACO received $6.6 million
from CMS as its share of the savings and divided it among the participating hospitals and physicians in the
Indianapolis region. Franciscan Alliance has also formed two other ACOs that participate in the Medicare
Shared Savings Program as well as a commercial ACO with Cigna, and additional ACO agreements for the
system are likely. See the Health Systems and Hospitals section of this report for more information.

January 2014 - HealthLeaders-InterStudy publishes data update


This update provides new HealthLeaders-InterStudy enrollment and pharmacy data for health plans in
the Indianapolis market; enrollment updates include new information on commercial plans, Medicaid,
Medicare, and the uninsured. This update also provides a refresh of Medicare hospital statistics from
Billians HealthDATA.

2014 Market Overview

CITY: INDIANAPOLIS

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Executive Summary
Market Outlook
Although the Indianapolis market has seen explosive growth and major expansion announcements in recent
years, some of the affiliation deals that made headlines have now been called off. The large health systems are
being much more strategic about their growth, focusing more on cost-cutting, and physician employment
has slowed. Managed care organizations are exploring new options such as narrow networks and private
exchanges to increase their enrollment, and these are becoming increasingly attractive to employers facing
the requirements of the Affordable Care Act and wanting to contain their costs. The Indianapolis market
likely will see strong pharmaceutical sales because of its unhealthy population, but most of the markets
healthcare entities are ramping up their population health management strategies, and cost-conscious
consumers continue to choose low-cost health plans that have less-generous drug coverage.

Highlights:
Indianapolis health systems made headlines this year by implementing significant cuts to their
workforces. The systems, which are some of the largest employers in the state and have the most
influence among players in the healthcare market, are all attempting to decrease costs and increase
efficiency across their networks. Because of the clout of the health systems sector in Indianapolis, these
cuts will likely impact other sectors of the market in the coming years.
M
 arian University in Indianapolis opened the states second medical school in August 2013, enrolling
162 students in its inaugural class. Also, IU School of Medicine is expanding its class sizes in order to
train more physicians each year. Although Indianapolis has a strong supply of physicians, there is a
shortage of providers in the states rural areas, and a physician shortage, especially among primary-care
providers, is predicted across the state in the coming years. We expect to see additional agreements
announced with the markets health systems to provide residency and training opportunities for the
increased number of students.
N
 arrow network plans, though historically unpopular in Indianapolis, likely will become more attractive
to employers looking to decrease their healthcare costs and could help managed care organizations
increase their enrollment. The plans offered on the federally administered health insurance exchange in
the Indianapolis market include some narrow network arrangements, and Anthems network excludes
some of the largest health systems in the state from its exchange plans. However, the growth of limited
network offerings could be hindered by employee pushback, since the heavily unionized market is
accustomed to rich healthcare benefits.
W
 e expect to see the workplace clinic trend, which has boomed in Indianapolis in recent years, expand
to smaller employers. Although on-site clinics have been used predominantly by the markets largest
employers and schools, small employers are now banding together to form multiemployer clinics,
which are ideal for businesses that have too few employees or have workforces that are geographically
dispersed across the region. This increased access to care will likely increase pharmaceutical sales in
the market.
G
 ov. Mike Pence has proposed an alternative to expand Medicaid eligibility in Indiana using an altered
version of the states Healthy Indiana Plan. Known as Healthy Indiana Plan 2.0, the waiver would use
federal Medicaid funding to enroll residents with incomes up to 138 percent of the federal poverty level
and would eliminate the coverage gap that currently exists for people who earn too much to qualify
for Medicaid and too little to qualify for federal subsidies through the state health insurance exchange.
The governor plans to submit his proposal to the Centers for Medicare & Medicaid Services by the
end of June 2014.

2014 Market Overview

CITY: INDIANAPOLIS

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Indianapolis Market
Analysis for Indianapolis Healthcare Market

Market Indicators
Table 3-2:

Market Stage: Innovative*

Market

Moderate to high degree of health system/physician clinical integration


Moderate presence of integrated delivery networks offering health plans, ACOs, and/or direct contracts with employers
Large number of payment and patient-care innovations
Serious interest in developing quality/cost indicators
*For definitions of other market stages, see the Market Overview Product Manual.
Source: HealthLeaders-InterStudy, 2014.

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Table 3-3:

Market Stage Analysis

Indianapolis has a high degree of clinical integration between its health systems and physicians, with the large, integrated delivery
networks employing most of the physicians in the region. Many of the hospitals also have stakes in local health plans, and these plans
are expected to expand in the coming years. Population health management continues to gain traction in Indianapolis. There are
numerous ACOs in operation, led primarily by the health systems, including a Pioneer ACO operated by Franciscan St. Francis Health
that already has shown significant savings in its first year.
Source: HealthLeaders-InterStudy, 2014.


Table 3-4:

Market Drivers

Health Systems
and Hospitals

Physicians

Health Plans

State Legislation

Employers

KEY MARKET

NO

YES

YES

NO

Source: HealthLeaders-InterStudy, 2014.

Table 3-5:

Analysis of Market Drivers

Indianapolis largest health systems, including IU Health, St. Vincent Health, Community Health Network, and Franciscan St. Francis
Health, are the ultimate drivers in the market. Their integrated delivery networks span the region and state, and their large employed
physician groups, ownership of health plans, and sheer size and integration give them clout to negotiate favorable rates with insurers.
The national carriers that dominate in Indianapolis do have some influence as well, especially Anthem, since its parent company,
WellPoint, is based in the market. Recent legislation has also been a factor affecting the market, since the Affordable Care Act has
remained unpopular among Indiana legislators and legislation affecting scope of practice of mid-level providers and telemedicine has
been addressed in recent years.
Source: HealthLeaders-InterStudy, 2014.


Table 3-6:

Market Consolidation
Hospital
segment

High: 2 or 3 organizations control about 80% of the market.


Moderate: 4 or 5 organizations control about 70% of the market.

Physician
segment

Health plan
segment

Low: More than 5 organizations control about 70% of the market.


Source: HealthLeaders-InterStudy, 2014.

2014 Market Overview

CITY: INDIANAPOLIS

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Leading Organizations and Health Plans

Table 3-9:

Health Systems/Hospitals

Name

Total # of Hospitals

Total # of Beds

Market Share*

IU Health

1,947

34%

St. Vincent Health

1,406

22%

Community Health Network

1,136

20%

*Based on inpatient discharges.


Sources: HealthLeaders-InterStudy, 2014; based on data from Billians HealthDATA, released in October 2013.

Table 3-10:

Physician Organizations
Total # of Physicians

Name
Suburban Health Organization

2,687

IU Health Physicians

1,000+

St. Vincent Medical Group

750

Source: HealthLeaders-InterStudy, 2014.

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Table 3-11:

Total Enrollment*

Plan

Enrollment

Market Share

WellPoint**

648,703

46%

Cigna

212,730

15%

UnitedHealth Group

167,928

12%

Enrollment

Market Share

119,023

38%

AmeriHealth Caritas Family of Companies (MDWise)

85,291

27%

Centene

48,887

16%

Enrollment

Market Share

WellPoint**

396,986

50%

Cigna

209,907

26%

Aetna

49,984

6%

Enrollment

Market Share

WellPoint**

132,694

49%

UnitedHealth Group

120,146

44%

10,774

4%

*All HMO, PPO, POS, indemnity, Medicaid, and Medicare products.


**Projected.
Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.


Table 3-12:

HMOs*

Plan
WellPoint**

*All HMO products, including Medicaid and Medicare.


**Projected.
Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Table 3-13:

PPOs*

Plan

*Includes fully and self-insured commercial and Medicare PPO enrollment.


**Projected.
Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Table 3-14:

POS*

Plan

Southeastern Indiana Health Insurance


*Includes fully and self-insured point-of-service plans.
** Projected.
Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

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MCO-Managed Medicaid*

Table 3-15:

Plan

Enrollment

Market Share

AmeriHealth Caritas Family of Companies (MDWise)

85,291

39%

WellPoint

84,955

39%

Centene

48,887

22%

Enrollment

Market Share

UnitedHealth Group

20,371

29%

Humana

15,422

22%

ADVANTAGE Health Solutions

12,123

17%

*Includes Title 19, CHIP, and other managed Medicaid lives.


Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

MCO-Managed Medicare*

Table 3-16:

Plan

*Includes HMO, PPO, PFFS, and other managed Medicare lives.


Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Major Employers

Table 3-17:

Name

# of Employees

State government

68,208

Federal government

11,368

Allison Transmission

9,670

Wal-Mart Stores Inc.

9,668

City of Indianapolis

8,889

Indiana University

7,466

St. Vincent Health

7,351

Indianapolis Public Schools

6,969

Sources: HealthLeaders-InterStudy, 2014; January 2013 Employer Vantage.

Table 3-18:

Pharmacy Chains

Name
CVS/pharmacy, Kroger, Marsh Supermarket & Pharmacy, Meijer, Target, Walgreens, Wal-Mart, Wellspring Pharmacy
Source: HealthLeaders-InterStudy, 2014.

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Health Systems and Hospitals


Table 4-1

YES

KEY MARKET DRIVER

Sector Outlook
Large, integrated delivery networks dominate the health system sector in Indianapolis, and the sector as a
whole has immense influence in the market. All the major systems have announced significant cost-cutting
measures and layoffs in recent years to increase efficiency and quality across their statewide networks. The
hospitals are also being more strategic about growth, postponing large expansion projects, and the spree of
buying smaller community hospitals has tapered off this year. Population health management strategies are
becoming popular among Indianapolis health systems, and we expect to see additional ACO agreements
formed in the coming years.

Market Profile
The top four health systems in Indianapolis account for 84 percent of the markets inpatient discharges. IU
Health, an academic system affiliated with the Indiana University School of Medicine, is the largest system in
the market. St. Vincent Health, a Catholic system that is part of St. Louisbased nonprofit Ascension Health,
is the second largest, and regional nonprofit system Community Health Network is the third largest in the
market. Next largest are Eskenazi Health, which is owned by the Health and Hospital Corporation of Marion
County and is the regions safety net system, and Franciscan St. Francis Health, another faith-based system.
Indiana has two cancer centers designated by the National Cancer Institute: the Indiana University Melvin
and Bren Simon Cancer Center in Indianapolis and, outside the Indianapolis market, the Purdue University
Center for Cancer Research in West Lafayette.

Table 4-2:

Indianapolis Hospital Market Data


Acute-care
Hospitals:*

Estimated
Annual
Inpatient
Discharges:

33

230,337

Acute-care
Beds:

Average Daily
Occupancy
Rate:

5,961

55%

Average Length
of Stay (days):

Medicare
Percentage of
Acute-care
Discharges:

Medicaid
Percentage of
Acute-care
Discharges:

6.0

33%

13%

*Excludes Richard L. Roudebush VA Medical Center.


**Data for inpatient discharges, average occupancy, ALOS, and Medicare/Medicaid patient volume exclude IU Health Saxony Hospital, which opened December 2011; Franciscan St. Francis
HealthCarmel, which opened April 2012; and St. Vincent Fishers Hospital, which opened April 2013.
Source: Most recent Medicare hospital statistics from Billians HealthDATA, released in October 2013.

Highlights:
Clinical integration:
Indianapolis health systems have spent millions of dollars in recent years acquiring physician groups
and building new facilities to expand their integrated delivery networks across central Indiana. Health
systems, which are fiercely competitive about attracting patients to their facilities, have increased their
clinical collaboration, although two partnerships have recently been dissolved. Eskenazi Health and
Community Health Network formed a joint operating agreement in 2013 that created a primarycare behemoth in Indianapolis, but that partnership was called off in mid-2014. In addition, St.

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Vincent Health, Community Health Network, and Suburban Health Organization partnered for an
Accountable Care Consortium in 2012, but the ACC is being dissolved because the requirements of
healthcare reform were too daunting for the combined organization, especially since the individual
systems took different approaches to Indianas health insurance exchange. The markets hospital
systems also have stakes in local health plans, which makes the systems even more integrated and
has affected how the systems have responded to healthcare reform. One of the system-owned plans
is currently competing on the states health insurance exchange, and another health system has
expressed interest in expanding its health plan to compete on the exchange in the future.
Payment reform/care coordination:
ACO formation in Indianapolis has been led by health systems. Although the Accountable Care
Consortium is being dissolved, watch for the ACCs participating health systems to launch ACOs
on their own following the success of Franciscans Pioneer ACO, which reported cost savings of
$13.3 million for 2012. Most of the integrated delivery networks in the Indianapolis market also have
ownership in health plans, which give them experience managing risk and make them desirable
partners for accountable care initiatives.
The Centers for Medicare & Medicaid Services is operating two programs that use payment rewards
and penalties to drive hospital quality improvements. Hospitals can gain up to 1.25 percent of their
Medicare payments or lose up to 3.25 percent for the programs second year, which began Oct. 1, 2013.
The Hospital Readmissions Reduction Program penalizes hospitals deemed to have too many
readmissions of patients who were originally admitted for a heart attack, heart failure, or pneumonia.
Medicare hospital reimbursements for patient stays are being reduced by up to 2 percent. In
Indiana, hospitals are receiving an average penalty of 0.32 percent, compared with the national
rate of 0.38 percent (Kaiser Health News analysis of CMS data). Penalties for individual hospitals in
the Indianapolis market include 0.54 percent for Wishard Memorial Hospital, 0.47 percent for St.
Vincent Anderson Regional Hospital, and 0.38 percent for Community Heart & Vascular Hospital.
Beginning in October 2014, reimbursements will be reduced by up to 3 percent, and CMS plans to
begin penalizing hospitals for readmissions of patients with additional conditions, such as chronic
lung disease.
Growth strategy/patient flow:
Health systems in the market have become much more strategic about their growth strategies. Each
of the major health systems in Indianapolis historically occupied its own area around the city, but in
recent years the systems have been expanding into each others territories to compete for well-insured
patients. This expansion could decrease hospitals negotiating leverage with insurers since they no
longer have geographic exclusivity. Health systems are also focused on increasing convenience for
patients, constructing centers that combine all types of womens services in one convenient location,
so we could see additional facilities built as one-stop shops for other types of care.
Financial dynamics:
IU Health, St. Vincent Health, and Franciscan St. Francis all made cuts to their workforces throughout
2013, and in some cases those layoffs were significant. The health systems are attempting to increase
efficiency and decrease costs across their networks to address healthcare reform, declining Medicare
reimbursements, and decreased inpatient stays.
Information technology:
The Indiana Health Information Exchange, launched in 2004, includes more than 80 hospitals, and
more than 14,000 Indiana physicians, and shares information with other HIEs. Market experts say
that exchanges are particularly important in the Indianapolis market because of the high patient
crossover among health systems. Although hospitals in Indianapolis use different electronic medical
records systems, the exchanges allow them to share data and records.

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Fifty-two percent of nonfederal acute-care hospitals in Indiana had adopted at least a basic EMR
system as of 2012 (American Hospital Association/ Office of the National Coordinator for Health
Information Technology; data released March 2013).

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IU Health
Table 4-3

Local
Hospitals:

Local
Hospital
Beds:

Physicians
Employed:

Physicians
Affiliated:

1,947

1,000+

3,700

ACO Type:

Medical
Homes:

Assumes
Financial
Risk:

Medicare

Yes

Yes

GPO:
UHC, VHA,
Novation,
MedAssets

Acute-care hospitals:
IU Health Methodist Hospital (including IU Health University Hospital and Riley Hospital for Children at IU Health), Indianapolis, 1,462
beds
IU Health North Hospital, Carmel, 189 beds
IU Health West Hospital, Avon, 142 beds
IU Health Morgan Hospital, Martinsville, 112 beds
IU Health Saxony Hospital, Fishers, 42 beds
Major outpatient centers:
IU Health Neuroscience Center, Indianapolis
IU Health Proton Therapy Center, Bloomington (joint venture with Indiana University Research and Technology Corp.)
Physician groups:
IU Health Physicians, with more than 1,000 physicians
Health plan:
Indiana University Health Plans, a Medicare HMO with 8,716 members statewide as of Jan. 1, 2013
Part owner of MDWise, a Medicaid HMO with 86,400 local members as of Jan. 1, 2013
Other details:
Indiana University School of Medicine
NCI-designated Indiana University Melvin and Bren Simon Cancer Center
IU Health Central Indiana Cancer Centers, part of IU Health Cancer Centers
Sources: HealthLeaders-InterStudy; based on data from Billians HealthDATA, released in October 2013.

Description
Academic medical center IU Health, which changed its name from Clarian Health in 2011, is the largest
health system in Indianapolis and continues to add affiliate facilities to its statewide network. Its core
facilities are its three downtown Indianapolis hospitals and four hospitals in the suburbs.
IU Health Methodist Hospital includes one of Indianas two Level I trauma centers, while IU Health
University Hospital is the primary teaching facility of the Indiana University School of Medicine and
includes the IU Simon Cancer Center. Riley Hospital for Children includes the only Level I pediatric trauma
center in the state as well as Indianas only pediatric burn unit.
Outside of the Indianapolis market, IU Health has 12 additional acute-care hospitals across the state.
IU Health and the Health and Hospital Corporation of Marion County, the parent of Eskenazi Health, are
the owners of MDWise, the markets largest managed Medicaid plan. Although MDWise has primarily been

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a managed Medicaid provider, it expanded into the individual market in Indiana in 2014 by offering plans
on the states health insurance exchange in order to provide for Medicaid customers who switch between
the two programs.
Table 4-4:

IU Health Hospital Data

Percentage of
Markets Inpatient
Discharges:*

Percentage of
Markets Acutecare Beds:

Average Daily
Occupancy Rate:

Average Length of
Stay (days):

Medicare
Percentage of
Systems Acutecare
Discharges:

34%

33%

63%

6.1

26%

Medicaid
Percentage of
Systems Acutecare
Discharges:
11%

*Data for inpatient discharges, average occupancy, ALOS, and Medicare/Medicaid patient volume exclude IU Health Saxony Hospital, which opened in December 2011.

Source: Most recent Medicare hospital statistics from Billians HealthDATA, released in October 2013.

News and Analysis


IU Health, the largest health system in the market and state, was more deliberate about its growth in 2013. It
paused a major construction project, closed or sold some of its facilities, cut more than 900 jobs, and began
trimming costs. The health system will renew its insurance push in 2014 and hopes to launch a new health
plan that can be competitive in the Indianapolis market.
Expansion projects: Although IU Health has been involved in massive expansion projects in recent years, the
system has been much more selective about its growth in 2013 and has even divested some of its operations.
I n March 2013, IU Health tabled plans for its $500 million, 250-bed critical-care tower at Methodist
Hospital, which was scheduled for completion in 2015.
I U Health sold its eight occupational health clinics to California-based US HealthWorks Medical Group
in summer 2013. US HealthWorks now operates more than 200 clinics in 19 states. Specialists employed
by IU Health will still be involved with US HealthWorks patients as needed, and officials at the health
system said that the sale will allow IU Health to focus on other services for employers, including on-site
clinics and health plans (Indianapolis Business Journal, accessed Dec. 16, 2013).
Accountable care organizations: IU Health ACO was selected to participate in the Medicare Shared
Savings Program in July 2012. The ACO serves Medicare beneficiaries in Indiana and includes
approximately 1,800 physicians.
Health plan: IU Healths commercial insurance arm, IU Health Plans, is expanding its operations and plans
to compete in Indianas health insurance exchange, beginning in 2015. Although the system has struggled to
enroll people in its narrow network plans, consumers are becoming much more receptive to narrow network
products because of the lower premiums.
Physician relationships: IU Health Saxony Hospital opened a Breast Care program in August 2013, adding
two breast surgery specialists to its staff and increasing the womens services offered at the Fishers hospital.
Financial performance: IU Health cut more than 900 jobs in late 2013. The system is attempting to trim $1
billion in costs over the next five years. In December 2013, the system closed its IU Health Central Indiana
Cancer Centers Southone of six such cancer centers in the marketas a cost-cutting measure.
Contracting: IU Health and UnitedHealthcare reached a new reimbursement agreement in February 2014
after the previous contract expired at the end of 2013. Care received at IU Health in 2014, prior to the new
agreement, has still been billed at in-network rates.

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Key personnel changes: In May 2013, Dennis Murphy was named chief operating officer of IU Health.
Awards: IU Health Methodist Hospital (including IU Health University Hospital and Riley Hospital for
Children) ranked 16th among the 18 hospitals nationwide that appeared on the 2013-2014 U.S. News &
World Report Honor Roll of Americas best hospitals. This designation requires high scores in six or more
of the 16 specialties covered by the report.
IU Health North Hospital is a nationally ranked facility for ear, nose, and throat and orthopedics. IU Health
West Hospital is a top-ranking facility in Indianapolis for gastroenterology and gastrointestinal surgery,
geriatrics, nephrology, pulmonology, and urology (U.S. News & World Report).

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St. Vincent Health


Table 4-5

Local
Hospitals:

Local
Hospital
Beds:

Physicians
Employed:

Physicians
Affiliated:

1,406

750

3,000
(statewide)

ACO Type:

Medical
Homes:

Assumes
Financial
Risk:

GPO:

N/A

N/A

Yes

MedAssets

Acute-care hospitals:
St. Vincent Indianapolis Hospital (including St. Vincent Womens Hospital and Peyton Manning Childrens Hospital at St. Vincent), 805
beds
St. Vincent Anderson Regional Hospital, 295 beds
St. Vincent Carmel Hospital, 124 beds
St. Vincent Heart Center of Indiana, Indianapolis, 107 beds
St. Vincent Fishers Hospital, 50 beds (opened April 2013)
St. Vincent Mercy Hospital, Elwood, 25 beds
Physician groups:
St. Vincent Medical Group, with 750 physicians
Member of Suburban Health Organization, a physician/hospital organization in Indianapolis
Health plan:
Majority owner of Advantage Health Solutions, with 55,105 local members as of Jan. 1, 2013
Other details:
Minority stake in Indiana Orthopaedic Hospital in Indianapolis
Sources: HealthLeaders-InterStudy; based on data from Billians HealthDATA, released in October 2013.

Description
St. Vincent Health, the second-largest health system in Indianapolis, serves 47 counties in central Indiana
and is part of St. Louisbased Ascension Health, a Catholic system.
The health systems largest and most central campus, St. Vincent Indianapolis Hospital, includes St. Vincent
Womens Hospital and Peyton Manning Childrens Hospital at St. Vincent. Its suburban hospitals are St.
Vincent Carmel in Hamilton County, and St. Vincent Mercy and St. Vincent Anderson Regional Hospital
in Madison County.
St. Vincent owns a majority stake in St. Vincent Heart Center of Indiana, which is a joint venture with
The Care Group, a physician group it acquired in 2010. The system also holds a minority stake in Indiana
Orthopaedic Hospital.
The system is affiliated with 10 acute-care Indiana hospitals outside the Indianapolis market.
Advantage Health Solutions, one of the largest managed Medicare plans in Indianapolis, is owned by four
Catholic health systems, including majority-owner St. Vincent Health and Franciscan St. Francis Health.

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Table 4-6:

St. Vincent Health Hospital Data

Percentage of
Markets Inpatient
Discharges:*

Percentage of
Markets Acutecare Beds:

Average Daily
Occupancy Rate:

Average Length of
Stay (days):

Medicare
Percentage of
Systems Acutecare
Discharges:

22%

24%

51%

7.2

35%

Medicaid
Percentage of
Systems Acutecare
Discharges:
14%

*Data for inpatient discharges, average occupancy, ALOS, and Medicare/Medicaid patient volume exclude St. Vincent Fishers Hospital, which opened in April 2013.
Source: Most recent Medicare hospital statistics from Billians HealthDATA, released in October 2013.

News and Analysis


St. Vincents network statewide now rivals IU Healths in terms of number of hospitals, so expect to see
more competition between these two large health systems. St. Vincent is focused on attracting patients in
affluent areas of the Indianapolis market, and now that its accountable care agreement with Community
Health Network and Suburban Health Organization is being dissolved, St. Vincent is likely to pursue ACO
agreements on its own.
Expansion projects: St. Vincents expansion plans include strategic projects designed to attract patients in
affluent suburbs with convenient locations.
S t. Vincent Medical Center Northeast was converted to a 50-bed inpatient hospital and renamed St.
Vincent Fishers Hospital in April 2013. The $48 million, 110,000-square-foot expansion will allow St.
Vincent to better compete for patients in the growing suburb of Fishers.
T
 he health system broke ground in February 2014 on a womens health center on the St. Vincent Carmel
campus that will serve as a one-stop shop for womens healthcare needs. The building, which will house
physicians and womens outpatient services, is expected to be completed by early 2015, and St. Vincent
says it could open a similar facility for mens health services in the future.
Accountable care organizations: The Indiana Accountable Care Consortium that involved St. Vincent,
Community Health Network (the markets third-largest health system), and Suburban Health Organization
(the areas largest physician organization) dissolved in May 2014. The consortiums network of physicians
and facilities had served as the health plan network for employees of all three organizations, and the ACC,
which launched in October 2012, planned to expand its offerings to other employers and insurers. The ACC
dissolved because each of the participating provider organizations are approaching the requirements of
healthcare reform in different ways, which made it difficult to operate as a single organization.
Financial performance: St. Vincent laid off 5 percent of its workforce in summer 2013, including its chief
medical officer and chief medical informatics officer. The health system employs approximately 17,000 people.
Key personnel changes: Effective July 1, 2013, Vincent Caponi stepped down as CEO of St. Vincent
Health and assumed the roles of senior vice president at Ascension Health Alliance, St. Vincents parent
organization, and executive chairman of the board at St. Vincent Health. He was replaced by Jonathan Nalli,
who previously served as CEO of for-profit Porter Health System in Valparaiso, effective Feb. 1, 2014.
Awards: St. Vincent Indianapolis Hospital is a nationally ranked facility for ear, nose, and throat and
gynecology. St. Vincent Carmel Hospital is a top-ranking facility in Indianapolis for orthopedics. St. Vincent
Heart Center of Indiana is a top-ranking facility in Indianapolis for geriatrics (U.S. News & World Report).

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Community Health Network


Table 4-7

Local
Hospitals:

Local
Hospital
Beds:

Physicians
Employed:

Physicians
Affiliated:

1,136

500

2,000

ACO Type:

Medical
Homes:

Assumes
Financial
Risk:

N/A

Yes

Yes

GPO:
VHA,
Novation

Acute-care hospitals:
Community Hospital North, Indianapolis, 373 beds
Community Hospital East, Indianapolis, 228 beds
Community Hospital Anderson, 207 beds
Community Hospital South, Indianapolis, 150 beds
Community Westview Hospital, Indianapolis, 120 beds
Community Heart & Vascular Hospital, Indianapolis, 58 beds
Major outpatient centers:
Six Community Surgery Center (formerly Indiana Surgery Center) locations in the Indianapolis market
Physician groups:
Community Physician Network, with 500 physicians
Other details:
Eight MedCheck urgent-care centers
12 Community Health Pavilions
Wellspring Pharmacy, with five retail locations
Affiliation with Eskenazi Health
Sources: HealthLeaders-InterStudy; based on data from Billians HealthDATA, released in October 2013.

Description
The nonprofit Community Health Network offers six acute-care hospitals and more than 90 sites of care
throughout central Indiana.

Community Hospital North has become the systems primary facility, owing to its favorable location in
a more affluent section of the market. Community Heart & Vascular Hospital (formerly Indiana Heart
Hospital) is on the Community Hospital North campus. Community Westview Hospital is the only
osteopathic hospital in the state. Community East and North hospitals are members of the Houston-based
MD Anderson Cancer Network and are the only hospitals in Indiana that have this affiliation.
Outside of the Indianapolis market, Howard Regional Health System in Kokomo joined the system in July
2012 and was renamed Community Howard Regional Health.
Community Health Network also owns Visionary Enterprises Inc., a for-profit corporation that develops
and manages healthcare ventures with physicians and hospitals.

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Table 4-8:

Community Health Network Hospital Data

Percentage of
Markets Inpatient
Discharges

Percentage of
Markets Acutecare Beds:

Average daily
Occupancy Rate:

Average Length of
Stay (Days):

Medicare
Percentage of
Systems Acutecare
Discharges:

20%

19%

63%

5.1

35%

Medicaid
Percentage of
Systems Acutecare
Discharges:
10%

Source: Most recent Medicare hospital statistics from Billians HealthDATA, released in October 2013.

News and Analysis


Community Health Networks strategy has included seeking ways to decrease costs and increase efficiency
across its system. The system has also recently announced several significant collaboration agreements with
well-known entities that will increase its presence in the market and state.
Affiliation: A joint operating agreement established in February 2013 between Community Health
Network and Eskenazi Health (formerly known as Wishard Health Services) was rescinded in June 2014
because of legal and financial hurdles interrupting the deal. Community Health Network stated that it was
interested in training medical students, and Eskenazithe regions safety net health systemhas a close
relationship with IU School of Medicine. CHN and Eskenazi would have created a primary-care behemoth
in the market. Combined, they have 29 health centers providing primary care and 29 locations providing
behavioral healthcare.
Accountable care organizations: Community Health Networks accountable care consortium with St.
Vincent Health and Suburban Health Organization dissolved in May 2014 after launching in late 2012.
Because the other two major health systems in IndianapolisFranciscan St. Francis Health and IU Health
had launched ACOs, St. Vincent and Community Health decided to team up for one as well. Although the
ACC no longer exists, CHN will likely seek additional ACO agreements on its own.
Physician relationships: Community Health Network partnered with Ball State University to create the
Nursing Academy, which enrolled its first students in fall 2013. The three-year bachelors degree program
allows nursing students to complete their classes at Ball State, online, and via video conferencing, and receive
their training at CHN hospitals. The goal is to increase the supply of registered nurses in Indiana, and 48
students will be accepted into the program annually.
Clinical collaboration: In 2013, Community Health Network began a clinical collaboration with seven
Healthcare Clinic at Walgreens locations in the Indianapolis market. The partnership provides more
convenient access to care and allows providers from both organizations to share patient information and
data in order to better coordinate care for patients. In mid-2013, CHN began integrating the electronic
health records of Healthcare Clinic patients into its Community CareConnect EMR system. In April 2014,
Walgreens added an additional seven locations throughout central Indiana to the clinical collaboration,
bringing the number of locations to 14.
Financial performance: Community Health Network announced a restructuring of its organization in
mid-2013 as a way to increase its profitability. The system is hoping to cut expenses by about 20 percent,
and although it has cut more than $100 million since 2009 by streamlining its supply chain and not filling
vacant positions, CHN hopes to cut an additional $100 million by 2015. As a way to increase efficiency and
decrease waste, Community Health Network is in the process of standardizing its care, so patients with the
same condition will have the same treatment pathway throughout the health system.
Key personnel changes: In December 2013, Tom Malasto became the first chief patient experience officer
of Community Health Network.

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Other Health Systems and Hospitals

Eskenazi Health (previously Wishard Health Services)


Table 4-9

Percent of markets inpatient discharges: 7%


Acute-care hospitals: 1
Sidney and Lois Eskenazi Hospital, Indianapolis, 327 beds
Physician groups:
Eskenazi Medical Group, with 157 physicians
Sources: HealthLeaders-InterStudy; based on data from Billians HealthDATA, released in October 2013.

Description
Eskenazi Health (previously known as Wishard Health Services) is owned by the Health and Hospital
Corporation of Marion County, a nonprofit health system that cares for the regions poor and indigent, and
is the regions safety net hospital provider. The systems acute-care facility, Eskenazi Hospital, is just west of
the Indiana University School of Medicine campus. Eskenazi is a major teaching hospital for the Indiana
University School of Medicine and has a Level I trauma center and the regions only adult burn center.
Eskenazi Health owns MDWise, the markets largest managed Medicaid plan, in partnership with IU Health.

News and Analysis


Although much smaller than the other integrated health systems in Indianapolis, Eskenazi Health has
remained competitive. Though its partnership with Community Health Network has been called off,
Eskenazis new replacement hospital will likely draw more patients to the system.
Major events at Eskenazi Health include the following:
W
 ishard Memorial Hospitals $754 million, 327-bed replacement hospital, named Eskenazi Hospital,
opened in December 2013. In January 2014, the health system was renamed Eskenazi Health.
A
 joint operating agreement reached in February 2013 between Eskenazi and Community Health
Network was rescinded in June 2014 because of financial and legal hurdles interrupting the deal. The
agreement would have created a primary-care behemoth in the Indianapolis market and further aligned
the regions major players. Eskenazi planned to maintain its relationship with IU School of Medicine,
continuing to serve as a training site and teaching hospital for medical students, even though IU Health
is a rival of Community Health Network.

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Franciscan St. Francis Health


Table 4-10

Percent of markets inpatient discharges: 6%


Acute-care hospitals: 3
Franciscan St. Francis HealthIndianapolis, 222 beds
Franciscan St. Francis HealthMooresville, 77 beds
Franciscan St. Francis HealthCarmel, 6 beds (opened April 2012)
Physician groups:
Franciscan Physician Network, with 200 physicians
Health plan:
Minority stake in Advantage Health Solutions, with 55,105 local members as of Jan. 1, 2013
Sources: HealthLeaders-InterStudy; based on data from Billians HealthDATA, released in October 2013.

Description
Franciscan St. Francis Health is part of Franciscan Alliance, based in Mishawaka, which operates a total of
13 hospital campuses across Indiana and Illinois.
The flagship hospital, Franciscan St. Francis HospitalBeech Grove, was closed in phases throughout 2012
and operations were moved to the Indianapolis location. Franciscan St. FrancisIndianapolis is the only
full-service cardiac and vascular care program on the markets southern side. Franciscan St. FrancisCarmel
opened in April 2012 and is the systems smallest hospital, with six inpatient and eight outpatient beds, but
its north-side location rounds out St. Francis network.
Advantage Health Solutions, one of the largest managed Medicare plans in Indianapolis, is owned by four
Catholic health systems, including majority-owner St. Vincent Health and Franciscan St. Francis Health.

News and Analysis


Although Franciscan had to make job cuts this year, like the other large Indianapolis systems, Franciscan St.
Francis Health also had significant success with several of its initiatives. The system reported $13.3 million
in savings from its Pioneer ACO and faces no Medicare readmissions penalty for 2014. The formation of
additional ACO agreements by Franciscan is likely.
Major events at Franciscan St. Francis Health in 2013 include:
I n mid-2013, Franciscan St. Francis Health announced that its Pioneer ACO achieved $13.3 million in
cost savings in 2012, which is significant since nine other Pioneer ACOs left the program in 2013. The
ACO received $6.6 million from CMS as its share of the savings and divided it among the participating
hospitals and physicians in the Indianapolis region. Franciscan Alliance has also formed two other ACOs
that participate in the Medicare Shared Savings Program, as well as a commercial ACO with Cigna, and
additional ACO agreements in Indiana are likely. Most recently, it launched a commercial ACO with
Anthem Blue Cross and Blue Shield, effective April 1, 2014. The three-year ACO agreement includes all
11 of Franciscans hospitals in Indiana, as well as 300 Franciscan physicians and approximately 63,000
patients. Franciscan will assume downside risk during the second and third years of the ACO.
F
 ranciscan Alliance announced layoffs for 275 employees across its Indiana hospitals in October 2013.
The systems goal is to reduce costs by 15 percent to 20 percent, and Franciscan reduced benefits for
remaining employees, eliminating Franciscans employer match to the retirement savings program and
requiring increased cost sharing for health insurance.

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A
 s part of its strategy to decrease readmissions for heart failure patients, Franciscan St. Francis Health
in Indianapolis began telemonitoring patients after discharge and calling patients within 72 hours
to ensure prescription drug adherence and schedule follow-up appointments. Since it began this
initiative, Franciscan has seen a 70 percent decrease in the hospitals readmission rate for heart failure
patients (Indianapolis Star, accessed Dec. 17, 2013). The hospital faces no Medicare readmissions
penalty for 2014.
I n mid-2013, Franciscan began $36.5 million in renovations to its Indianapolis hospitals women and
childrens services facilities. The hospital hopes to attract more women to deliver babies at its facility
through these upgrades, which include increasing the number of post-partum rooms and constructing
additional private rooms in its Level III neonatal intensive-care unit. Construction is projected to be
completed in early 2015.

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Table 4-11:

Indianapolis Hospitals

Name
IU Health University Hospital

City
Indianapolis

Beds
551

St. Vincent Indianapolis Hospital

Indianapolis

545

IU Health Methodist Hospital

Indianapolis

460

Riley Hospital for Children at IU Health

Indianapolis

451

Community Hospital North

Indianapolis

373

Eskenazi Hospital

Indianapolis

327

St. Vincent Anderson Regional Hospital

Anderson

295

Community Hospital East

Indianapolis

228

Franciscan St. Francis HealthIndianapolis

Indianapolis

222

Community Hospital Anderson

Anderson

207

IU Health North Hospital

Carmel

189

St. Vincent Womens Hospital

Indianapolis

182

Johnson Memorial Hospital

Franklin

175

Hendricks Regional Health

Danville

160

Riverview Hospital

Noblesville

156

Community Hospital South

Indianapolis

150

IU Health West Hospital

Avon

142

St. Vincent Carmel Hospital

Carmel

124

Community Westview Hospital

Indianapolis

120

IU Health Morgan Hospital

Martinsville

112

Hancock Regional Hospital

Greenfield

112

St. Vincent Heart Center of Indiana

Indianapolis

107

Witham Memorial Hospital

Lebanon

90

Major Hospital

Shelbyville

80

Peyton Manning Childrens Hospital at St. Vincent

Indianapolis

78

Franciscan St. Francis HealthMooresville

Mooresville

77

Community Heart and Vascular Hospital

Indianapolis

58

St. Vincent Fishers Hospital (opened April 2013)

Fishers

50

Indiana Orthopaedic Hospital

Indianapolis

42

IU Health Saxony Hospital (opened December 2011)

Fishers

42

St. Vincent Mercy Hospital

Elwood

25

Putnam County Hospital

Greencastle

25

Franciscan St. Francis Health Carmel (opened April 2012)

Carmel

Richard L. Roudebush VA Medical Center

Indianapolis

6
N/A

Sources: HealthLeaders-InterStudy, 2014; based on data from Billians HealthDATA, released in October 2013.

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Physicians
Table 5-1

NO

MARKET DRIVER

Sector Outlook
The aggressive employment of physicians by health systems has tapered off this year, and health systems likely
will restructure their contracts with employed physicians to better align with population health management
strategies. We expect to see Indianapolis physicians launch additional coordinated care initiatives in order to
capitalize on the incentives being offered, especially if they begin receiving less pay from the health systems.
The market is seeing an increased demand for primary-care providers, so the regions medical schools are
expanding their class sizes, and we predict that guidelines will be loosened for mid-level providers in order
to offset the shortage of primary-care physicians.

Market Profile
Independence has dwindled among Indianapolis area physicians, as hospitals compete to acquire the most
providers for their systems and as physicians face high operating costs, decreased reimbursements, and the
requirements of healthcare reform. American Health Network, a large physician group in Indiana, remains
independent, but some physicians in the group could leave in the coming years to align with the regions
major health systems. Some independent physicians in Indianapolis have chosen to merge with a hospital
group because of decreasing patient referrals, as the market is highly consolidated and health systems tend
to refer to their own physicians.

Highlights:
Patient care access:
Recent initiatives are attempting to expand access to care in Indiana, which is especially important in
a state that is predominately rural.
The Indianapolis market has more physicians for its population size than the national rate, including
more primary-care physicians and more specialists (The Little Blue Book, January 2013). However, a
shortage of physicians is predicted in the coming years as baby boomers age and require more care.
Marian University in Indianapolis opened an osteopathic medical school, the states second medical
school, in August 2013, enrolling 162 students in its inaugural class. The Marian University College
of Osteopathic Medicine plans to grow to 600 students and aims to address Indianas shortage of
primary-care physicians in its rural areas. IU School of Medicine has also been expanding its class
sizes and plans to enroll more than 350 students by fall 2014.
Indiana has 48 nurse practitioners per 100,000 population, versus 58 per 100,000 nationwide, ranking
40th-highest among all 50 states and the District of Columbia (Kaiser Family Foundation analysis of
data from the Pearson Report). Indiana has 15 physician assistants per 100,000 population, versus 27
per 100,000 nationwide, ranking 47th-highest among all 50 states and the District of Columbia (Kaiser
Family Foundation analysis of data from the American Academy of Physician Assistants).

An increase in the low numbers of nurse practitioners and physician assistants could help offset the
shortage of primary-care providers. Indiana has more restrictive scope-of-practice laws for physician
assistants than for nurse practitioners. However, legislation passed in 2013 (HB 1099) loosens the

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restrictions on distance between PAs and their supervising physicians and increases prescribing
authority for PAs. These changes will be particularly helpful in the states rural areas, where patient
access to providers is especially limited.
Payment reform/care coordination:
Anthem launched a new physician reimbursement plan, known as Enhanced Personal Health Care,
in Indiana in 2013. Anthem rewards physicians for quality care based on their performance in 32
areas. Physicians receive, on average, $3.50 per month for each Anthem commercial enrollee, and any
savings the physicians achieve compared with their historic spending levels will be shared between
Anthem and the providers. Approximately 1,400 physicians from 38 primary-care practices in the
state have contracted with the program as of April 2014.
Wishard Health Services (now Eskenazi Health) was one of 64 organizations named as early adopters
of the National Committee for Quality Assurance Patient-Centered Specialty Practice recognition
program. It was one of only two groups in Indiana selected as early adopters, but other specialty
physician groups in Indianapolis could join the program as well since the market has been on the
forefront of the coordinated care movement and the largest health systems have adopted the patientcentered medical home model for their primary-care physicians.
Financial dynamics:
The vast majority of Indianapolis physicians are employed by health systems, and market experts
report that hospitals are looking at their contracts with physicians as one area in which to cut costs.
Physicians could see their pay cut as health systems include more population health management
requirements into their contracts, though some of the loss could be offset by initiatives that reward
them for quality care. Employed physicians have decreased negotiating leverage in the market since
their staff and equipment are owned by the regions health systems.
Transparency:
In December 2012, Quality Health First, a program supported by the Indiana Health Information
Exchange, began publishing clinical quality scores for more than 750 primary-care physicians from
174 practices around Indiana. Physician practices are measured in 21 categories and then compared
with other primary-care practices in their area and across the state.
Information technology:
In Indiana, 39 percent of office-based providers had implemented at least a basic electronic health
records system as of 2012, compared with 40 percent nationwide. Among primary-care providers,
the adoption rate in Indiana was 43 percent, compared with 44 percent nationwide. A basic EHR
system includes electronic prescription drug lists, clinical notes, and prescription orders. In the
Indianapolis market, the rate of physicians using an EHR to e-prescribe is 45 percent in Marion
County, 66 percent in Hendricks County, and 97 percent in Shelby County (Office of the National
Coordinator for Health IT).

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Suburban Health Organization


Table 5-2

Total physicians: 2,687

ACO type: N/A

Primary-care physicians: 482

Medical homes: Yes

Mid-level providers: N/A

Assumes financial risk: Yes

Description
Suburban Health Organization is a physician/hospital organization that comprises 11 central Indiana health
systems and their affiliated physicians. The organizations largest member is St. Vincent Health, and the
other sponsor facilities are Hancock Regional Hospital, Hendricks Regional Health, Henry County Hospital,
Johnson Memorial Hospital, Major Hospital, Margaret Mary Health, Riverview Hospital, Rush Memorial
Hospital, Community Westview Hospital, and Witham Health Services. The PHO manages centralized risk
and non-risk contracting for its members and negotiates and manages HMO contracts. SHO has its own captive insurance company, a vehicle that allows it to provide self-funded liability insurance to its members. It
also operates affinity groups that help administrators and physicians share best practices and exchange ideas.

News and Analysis


An accountable care consortium involving Suburban Health Organization, St. Vincent Health, and
Community Health Network dissolved in May 2014. This joint venture formed in October 2012 and
included 33 hospitals, dozens of outpatient facilities, and almost 1,700 physicians.
Margaret Mary Health and its physicians joined Suburban Health Organization in July 2013. The health
system is located in Batesville, outside of the Indianapolis market.

IU Health Physicians
Table 5-3

Total physicians: 1,000+

ACO type: Medicare

Primary-care physicians: 150+

Medical homes: Yes

Mid-level providers: 250

Assumes financial risk: Yes

Description
IU Health Physicians is the employed physician group of IU Health. Physicians affiliated with IU Health
Physicians oversee 19 CVS MinuteClinic locations in the Indianapolis region.

News and Analysis


IU Health Physicians continues to recruit physicians to its group. It has quite a bit of clout in the market since
IU Health is the largest health system in Indiana. The statewide network and integrated delivery system is
appealing to independent providers seeking the stability of being employed by a large health system.
IU Health ACO is part of the Medicare Shared Savings Program and includes approximately 1,800 physicians.

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St. Vincent Medical Group


Table 5-4

Total physicians: 750

ACO type: N/A

Primary-care physicians: N/A

Medical homes: N/A

Mid-level providers: N/A

Assumes financial risk: N/A

Description
St. Vincent Medical Group is the employed physician group of St. Vincent Health. St. Vincent Physician
Network merged with the newly named St. Vincent Medical Group under one common leadership structure
in 2011. The group has physicians in more than 30 specialties and more than 130 practice locations in
Indiana. St. Vincent Health has eight Immediate Care Centers across central Indiana that are staffed by its
physicians and nurse practitioners.

News and Analysis


The group continues to recruit additional physicians. In February 2013, six-physician Lung Care Group
joined St. Vincent Medical Group.

Community Physician Network


Table 5-5

Total physicians: 500

ACO type: N/A

Primary-care physicians: N/A

Medical homes: Yes

Mid-level providers: N/A

Assumes financial risk: N/A

Description
In 2012, Community Health Network launched a new primary-care and multispecialty physician group
that integrates all of its employed physicians, with the intent to make the health system as integrated and
efficient as possible. Known as Community Physician Network, the group includes more than 500 physicians
at more than 100 locations in central Indiana. Further integration of the group and health system took
place throughout 2012, as Community Health Network transitioned to a new Epic EMR system, known as
Community CareConnect, across its entire network.

News and Analysis


Community Physician Network continues to add physicians to its group. And in 2013, Community
Health Network began integrating the patient records at seven Walgreens Healthcare Clinic locations to
its Community CareConnect EMR system as part of a collaboration involving Walgreens and Community
Health Network. The integration of patient records allows providers to share patient information and data,
and CPN physicians can access their patients records if patients visit a Walgreens retail clinic for care. Seven
additional Walgreens locations in central Indiana were added to the collaborative in April 2014.

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American Health Network


Table 5-6

Total physicians: 155

ACO type: Medicare

Primary-care physicians: 70

Medical homes: Yes

Mid-level providers: 15

Assumes financial risk: N/A

Description
American Health Network is an independent physician system that covers two statesIndiana and Ohio
with more than 70 offices and 260 physicians. The group primarily consists of family-medicine physicians,
although it includes Indianas largest group of medical oncologists. It has 155 physicians and more than 50
locations in Indiana and offers disease management for chronic conditions.

News and Analysis


American Health Network is involved in three Medicare Shared Savings Program ACOs: Indiana Care
Organization, a partnership between AHM and Bloomington-based physician group Premier Healthcare;
American Health Network of Ohio Care Organization, which operates in central Ohio; and Franciscan
AHN ACO, a partnership between AHN and Franciscan St. Francis Health. The IT system of Advantage
Health Solutions, a health plan that Franciscan owns along with three other Catholic health systems, allows
American Health Network to coordinate care for the approximately 28,000 Medicare patients it treats by
connecting to any healthcare provider, even if the provider does not have an EMR system in place.
In 2011, American Health Network created a partnership with Goodwill Industries of Central Indiana,
which employs more than 3,000 people in 29 counties. The Good Signs Family Care Partnership is
Goodwills version of an on-site clinic for its employees. Registered nurses employed by American Health
Network make regular visits to each Goodwill location in central Indiana and follow up with employees who
have had recent medical issues.
American Health Network also offers this service to other interested employers through its Employer Health
Management program. In total, the group provides services to 13 employers with approximately 8,000 health
plan enrollees (Indianapolis Business Journal, accessed Dec. 19, 2013).
American Health Network providers also will be involved in Anthems pilot program to provide telehealth
services, including issuing drug prescriptions, to patients in Indiana without the establishment of an
in-person relationship between patient and physician. After the pilot phase, the Medical Licensing Board
of Indiana will assess whether to expand telemedicine regulations in the state, which currently allow
telemedicine visits only if the patient and physician have previously had an in-person visit.

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Additional Physician Organizations


Franciscan Physician Network:
Franciscan Physician Network was created in 2012 to unite all of Franciscans practices across Indiana
and Chicago into one group. Franciscan St. Francis Medical Group, which included all the physicians
affiliated with Franciscan St. Francis Health, is now part of Franciscan Physician Network. There are
more than 600 physicians in Franciscan Physician Network, more than 200 of whom practice in the
Indianapolis market at more than 50 locations. All of the physicians in the network have access to the
same Epic EMR system.
Two After-Hours Clinics operated by Franciscan Physician Network in Beech Grove and Indianapolis
were closed in June 2013; a third location, in Mooresville, remains open.
The group promotes the patient-centered medical home model and anticipates receiving NCQA
recognition in the first quarter of 2014.
Eskenazi Medical Group:
Wishards Eskenazi Medical Group was formed in 2012 from previous members of IU Medical
GroupPrimary Care. In April 2012, physicians at IU Medical GroupPrimary Care joined either
Eskenazi Medical Group or IU Health Physicians. Eskenazi Medical Group is composed of 157
physicians, all of whom are faculty members at the IU School of Medicine and practice at Eskenazi and
its community clinics. Many physicians within the group have achieved the highest level recognition
from NCQA as patient-centered medical homes.
Indiana Radiology Partners:
This 75-physician group is an affiliate of IU Health. It provides diagnostic services to the health systems
hospitals as well as to Eskenazi Health, the Roudebush VA Medical Center, and 11 outpatient centers.
OrthoIndy:
OrthoIndy is a 70-physician orthopedic group and the owner of the Indiana Orthopaedic Hospital in
Indianapolis, the sole specialty hospital in the region. In 2009, OrthoIndy partnered with St. Vincent
Health, which bought a minority stake in the hospital, to allow it to expand regionally. In addition
to its main campus, Indiana Orthopaedic Hospital has an IOH South location in Greenwood and an
IOH West location in Brownsburg.
The group also operates 11 OrthoIndy clinic locations, three walk-in clinics, and four outpatient
physical therapy locations.
In February 2013, OrthoIndy began providing orthopedic trauma care exclusively at the St. Vincent
Trauma Center at St. Vincent Indianapolis Hospital. The group had previously provided trauma
services to IU Health Methodist Hospital for more than 50 years.
Goodman Campbell Brain and Spine:
This large neurosurgery group, formed in January 2010 by the merger of the IU School of Medicine
Department of Neurological Surgery and the Indianapolis Neurosurgical Group, anchors the
neuroscience center recently built by IU Health. Goodman Campbell Brain and Spine is one of
the largest neurosurgery practices in the nation, with 38 physicians and 40 mid-level providers. Its
physicians work in all Indianapolis hospitals.
Urology of Indiana:
This 35-physician practice of urologists and urogynecologists sees patients at 20 locations in central
Indiana.

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Health Plans
Table 6-1

YES

Table 6-2:

MARKET DRIVER

Local & State Enrollment


Commercial
HMO:

Commercial
PPO:

Commercial
POS:

Indemnity:

Managed
Medicaid:

Managed
Medicare:

Local

82,304

745,288

270,251

12,266

219,133

70,326

State

222,760

2,038,798

790,312

60,530

712,403

248,243

>>>

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Sector Outlook
National managed care organizations dominate the Indianapolis health plan sector, but these carriers could
see increased competition in the coming years from health systemowned plans based in Indianapolis,
which are set up to offer lower prices and population health management strategies that could appeal to
employers. Health systems are interested in adopting coordinated care initiatives for their patients; this
would provide an opportunity for MCOs to decrease their costs by keeping patients healthier. We could see
narrow networks gain traction in the Indianapolis market, even though WellPoint (Anthem Blue Cross and
Blue Shield of Indiana) historically has touted its broad network, especially if the limited network exchange
plans prove to be successful.

Market Profile
The Indianapolis health plan sector is dominated by national insurers, including WellPointwhich is
based in IndianapolisCigna, and UnitedHealth Group. The national carriers, especially WellPoint in its
hometown, have influence in the Indianapolis market. MDWise and Advantage Health Solutions are local
plans that have significant market share in government-sponsored plans, and both are partly owned by
Indianapolis-based health systems.

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Highlights:
Commercial insurance plan design:
Although Anthem is still the largest health plan by total enrollment in Indianapolis, other commercial
carriers have begun competing more effectively with Anthem and have gained market share.
Consumer-driven health plans are increasingly popular, even among smaller employers, and the three
largest carriers have CDHP enrollment in Indianapolis. Although such plans provide less revenue
for MCOs, the insurers are still eager to gain or retain commercial lives in the market. There has also
been a shift in Indianapolis from enrollment in fully insured plans to self-insured plans as employers
attempt to decrease their healthcare costs and avoid penalties associated with the Affordable Care Act.
Government-sponsored plans:
There has been increased interest in managed Medicare plans in Indiana in recent years, providing a
growth opportunity for MCOs. Low- and no-premium Medicare Advantage plans, which typically
provide less-generous prescription drug coverage, are becoming increasingly popular in Indiana as
cost-conscious seniors look for the lowest out-of-pocket expense.
Advantage Health Solutions is one of the largest managed Medicare plans in Indianapolis. It is owned
by four Catholic health systems, including Franciscan St. Francis and St. Vincent Health.
Although Indianapolis-based MDWise primarily has been a managed Medicaid provider, it expanded
into the individual market in Indiana in 2014 by offering plans on the states health insurance
exchange in order to provide for Medicaid customers who switch between the two programs. MDWise
is owned by IU Health and the Health and Hospital Corporation of Marion County, parent company
of Eskenazi Health.
Health insurance exchanges:
Four insurers are offering plans on the federally run Indiana health insurance exchange: Anthem Blue
Cross and Blue Shield, Centene, MDWise, and Physicians Health Plan. However, only Anthem and
MDWise are offering plans in the Indianapolis region.
The plans offered on the exchange have narrow networks in the Indianapolis market, a significant shift
for the region since historically patients could travel freely among the largest systems. In the Indianapolis region, Anthem has limited its network to Community Health Network, Eskenazi Health, and
most of the Suburban Health Organization hospitals but has excluded some of the largest systems:
IU Health, St. Vincent Health, and Franciscan St. Francis Health. MDWise has included IU Health,
St. Vincent Health, and Franciscan St. Francis as well as Eskenazi in its network, offering a broader
but more expensive network compared with Anthem. Having narrow networks allows MCOs to
keep their premiums lower than if they offered traditional plans with broad networks. The difference
between the two networks likely contributed to the dissolution of the Accountable Care Consortium
among St. Vincent, Community Health Network, and SHO because the ACCs participating systems
contracted to be in separate networks on the exchange.
In December 2013, MDWise received permission from the Centers for Medicare & Medicaid Services
to expand its health insurance exchange plan offerings in Indiana to 71 counties, up from its original
launch in 45 counties, which will make the insurer more competitive and could significantly boost its
statewide enrollment.

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Table 6-4:

Public Exchange Enrollment Estimates for Indianapolis Market*

MCO:

Enrollment:

Market Share:

18,866

80%

AmeriHealth Caritas Family of Companies (MDWise)

2,993

13%

Physicians Health Plan of Northern Indiana

1,882

8%

0%

WellPoint

Centene Corporation
Total Market Enrollment

23,741

*Decision Resources Group uses a multi-demographic regression and consumer behavior model to estimate health plans public exchange enrollees who have paid premiums for individual
policies. Market Share percentages do not total 100% due to rounding.
Source: HealthLeaders-InterStudy, as of April 19, 2014.

WellPoint
Table 6-5:

Commercial Enrollment

>>>

Local
Statewide

Fully Insured
HMO:

Self-Insured
HMO:

Fully Insured
PPO:

Self-Insured
PPO:

Fully Insured
POS:

Self-Insured
POS:

Indemnity:

6,539

27,529

74,456

315,146

24,418

108,276

17,895

75,299

203,675

862,029

66,829

296,168

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014. Commercial enrollments are projected and include members of WellPoint plans based in other states.

Table 6-6:

Government-Sponsored Enrollment

>>>

Local
Statewide

Managed Medicaid:

Medicare HMO:

Medicare PPO:

Medicare PFFS:

Other Medicare:

84,955

7,384

236,440

102

38,580

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Description
Indianapolis-based WellPoint operates locally as for-profit Anthem Blue Cross and Blue Shield of Indiana.
Anthem provides benefits for employees of the State of Indiana, the markets largest employer.

News and Analysis


In January 2013, Anthem Blue Cross and Blue Shield of Indiana announced it would no longer provide
funding to Quality Health First, a program supported by the Indiana Health Information Exchange that
rewards physicians for quality care, effective May 31, 2013. Anthem paid more than $14.5 million in bonuses
to Indiana providers since it began participating in 2009, but discontinued its bonus payments to the more
than 2,200 participating physicians at the end of 2013.
Anthem plans to instead focus on its own physician reimbursement plan, known as Enhanced Personal
Health Care, which launched in Indiana in 2013. Anthem rewards physicians for quality care based on their
performance in 32 areas. Physicians receive, on average, $3.50 per month for each Anthem commercial
enrollee, and any savings the physicians achieve compared with their historic spending levels will be shared
between Anthem and the providers. Anthem reports that it has contracted with 1,400 physicians in 38
primary-care practices in Indiana for this initiative (Anthem press release, accessed May 14, 2014).

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Anthem is offering 16 individual plans and five small-group plans on Indianas health insurance exchange,
which launched Oct. 1, 2013. Anthem is the only carrier offering plans on the exchange in all 92 counties
in Indiana. In the Indianapolis market, Anthem has limited its network to Community Health Network,
Eskenazi Health, and most of the Suburban Health Organization hospitals but has excluded some of the
largest systems: IU Health, St. Vincent Health, and Franciscan St. Francis Health.
Anthem launched its first ACO in Indiana, effective April 1, 2014, with Franciscan Alliances 11 hospitals across
the state. The three-year agreement includes approximately 63,000 patients and 300 Franciscan physicians.
WellPoint launched its own health insurance exchange in Indiana and eight other states in 2013. Anthem
Health Marketplace is an online exchange for employers with more than 50 employees and uses technology
developed by Bloom Health. Employees are given a fixed sum by their employer to purchase medical benefits
and can then choose from a pool of health plans on the exchange.
Anthem plans to launch a telemedicine pilot program with physician group American Health Network,
using Anthems Live Health Online technology. The pilot program, made possible by legislation (HB 1258)
passed in the 2014 session, would provide telehealth services, including issuing prescriptions, to patients
in Indiana without the establishment of an in-person relationship between patient and physician. After the
pilot phase, the Medical Licensing Board of Indiana will assess whether to expand telemedicine regulations
in the state, which currently allow telemedicine visits only if the patient and physician have previously had
an in-person visit.
In July 2014, WellPoint plans to launch a Cancer Care Quality Program in six states initially, including
Indiana. Oncologists will be eligible to receive $350 per month for each member on one of WellPoints
recommended clinical pathways. The pilot will initially be focused on lung, breast, and colorectal cancer and
is estimated to decrease cancer treatment costs by 3 percent to 4 percent.
In March 2013, Joe Swedish, previously president and CEO of Novi, Mich.-based Trinity Health, became
CEO of WellPoint.
In November 2013, Anthem launched a new partnership with the Indiana Manufacturers Association to
provide healthcare benefits to small employers. Manufacturers with 50 or fewer workers who join a group
insurance trust formed by the Indiana Manufacturers Association will have access to Anthems broadest
network plan and will be able to effectively avoid the community rating rules mandated by the Affordable
Care Act (Indianapolis Business Journal, accessed Dec. 18, 2013). Anthem could replicate this type of
partnership with other associations to create insurance trusts, which would allow it to significantly increase
its enrollment in its markets.

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Cigna
Table 6-7:

Commercial Enrollment
Fully Insured
HMO:

Self-Insured
HMO:

Fully Insured
PPO:

Self-Insured
PPO:

Fully Insured
POS:

Self-Insured
POS:

Indemnity:

Local

119

3,172

206,735

60

678

1,966

Statewide

140

10,630

343,943

170

1,843

5,128

>>>

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Table 6-8:

Government-Sponsored Enrollment
Managed Medicaid:

Medicare HMO:

Medicare PPO:

Medicare PFFS:

Other Medicare:

Local

Statewide

854

>>>

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Description
For-profit Cigna HealthCare is the second-largest MCO in the Indianapolis market and has the great
majority of its enrollment in self-insured accounts. Cigna provides healthcare benefits to the employees of
St. Vincent Health, one of the markets largest employers.

News and Analysis


Cigna launched an accountable care collaborative with Franciscan St. Francis Health in January 2013, the
first and only such arrangement in Indiana that Cigna has formed. As of December 2013, Cigna has 75
collaborative accountable care initiatives in 26 states.
Cignas acquisition of HealthSpring was completed in January 2012. The acquisition brought approximately
1.1 million national Medicare Part D members to Cignas rolls, including an additional 12,000 lives in
Indiana, as well as about 340,000 Medicare Advantage members nationwide.

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UnitedHealth Group
Table 6-9:

Commercial Enrollment

>>>

Local
Statewide

Fully Insured
HMO:

Self-Insured
HMO:

Fully Insured
PPO:

Self-Insured
PPO:

Fully Insured
POS:

Self-Insured
POS:

Indemnity:

253

20,479

3,145

31,322

88,824

3,532

1,628

54,079

13,171

103,601

215,635

20,800

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Table 6-10:

Government-Sponsored Enrollment
Managed Medicaid:

Medicare HMO:

Medicare PPO:

Medicare PFFS:

Other Medicare:

Local

20,371

Statewide

67,482

1,671

>>>

Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Description
For-profit UnitedHealth Group has most of its enrollment in the Indianapolis market in its
UnitedHealthcare plans.

News and Analysis


UnitedHealthcare and IU Health reached a new reimbursement agreement in February 2014 after
the previous contract expired at the end of 2013. IU Health announced that it would continue to treat
UnitedHealthcare beneficiaries at in-network rates during contract negotiations.
UnitedHealthcare provides benefits to Goodwill Industries of Central Indiana, and the plan includes no
copays for enrollees who visit a physician affiliated with American Health Network, one of the largest
physician groups in the market.
UnitedHealthcare has expressed interest in forming more ACO agreements with providers in its markets.
Although there are not any in the Indianapolis market as of early 2014, UHCs large membership in
Indianapolis means we could see ACO partnerships announced in the future between UnitedHealthcare
and local health systems or physician groups.
UnitedHealthcare has an online tool known as myHealthcare Cost Estimator that allows members to
compare prices among providers and hospitals for about 100 procedures and services. The tool is available
only in select markets, including Indianapolis and Lafayette.

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Table 6-11:

Health Plans and Pharmacy


2-tier
Design%

3-tier
Design%

4-tier
Design%

$Rx Generic
Copay

$Rx
Preferred
Brand Copay

$Rx
Nonpreferred
Brand Copay

N/A

N/A

100%

$20.00

$50.00

N/A

Cigna

7%

82%

11%

$7.81

$29.25

$44.92

UnitedHealthcare

0%

89%

9%

$10.00

$35.00

$60.00

Health Plan
Anthem Blue Cross and Blue Shield
of Indiana

Source: HealthLeaders-InterStudy, January 2014 Pharmacy Benefit Evaluator. Tier design is national company data for all Rx benefits; copay data is for the most typical plan offering.

Table 6-12:

Health Plans and Pharmacy Management


PBM Provides Formularies
or Formulary Consultation?

PBM Provides
Consultations on Benefit
Design?

Health Plan

PBM(s)

Anthem Blue Cross and Blue Shield of


Indiana

Express Scripts (retail, mail


order, specialty)

No

Yes

Cigna

Catamaran (retail, mail


order, specialty)

No

N/A

No

Yes

Accredo and Freedom


Fertility (specialty)

UnitedHealthcare

OptumRx (retail, mail order)


Source: HealthLeaders-InterStudy, January 2014 Pharmacy Benefit Evaluator. National company data.

Table 6-13:

Health Plans and Generics


Percent Spent
on Generics

Percent Spent on Preferred


Brands

Percent Spent
on Nonpreferred Brands

Anthem Blue Cross and Blue


Shield of Indiana

N/A

N/A

N/A

Cigna

68%

16%

15%

UnitedHealthcare

23%

43%

35%

Health Plan

Source: HealthLeaders-InterStudy, January 2014 Pharmacy Benefit Evaluator. National company data for all Rx benefits.

Note: For more information about health plans and pharmacy benefits, please contact HealthLeadersInterStudy about purchasing access to the Pharmacy Benefit Evaluator. Additional coverage includes
indicators of commercial, Medicaid, and Medicare business opportunity; indicators of branded drug
coverage; indicators of access to biological drugs; drug expenditures by therapeutic class; and indicators of
plans ability to control Rx benefit.

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Medicaid/Medicare/Uninsured
Table 7-1:

Medicaid
Total
Beneficiaries:

Percent of
Population:

MCO-Managed
Title 19
Medicaid:

MCO-Managed
CHIP:

Other MCOManaged
Medicaid:

Total MCOManaged
Medicaid:*

Local

320,123

16%

203,131

7,308

8,694

68%

State

1,062,611

16%

653,247

24,372

34,784

67%

>>>

*Represents percentage of total beneficiaries.


Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Indianas Medicaid programs include Hoosier Healthwise, a mandatory managed care program for lowincome children, pregnant women, and families. Hoosier Healthwise includes members of the Childrens
Health Insurance Program, which offers coverage to children whose families have incomes too high to be
eligible for Medicaid. Anthem Blue Cross and Blue Shield, Centene, and MDWise are the insurers who
participate in Hoosier Healthwise. Indiana Care Select is the states coverage for the aged, blind, and disabled
population, and MDWise and Advantage Health Solutions enroll program beneficiaries.
The Healthy Indiana Plan (HIP) is the states Medicaid waiver program for uninsured childless adults and
parents who have incomes of less than 200 percent of the federal poverty level and do not qualify for Medicaid. The program also includes, on a buy-in basis, those whose incomes are more than 200 percent of the
federal poverty level.
HIP was the states first successful attempt to target uninsured adults and the first Medicaid plan in the nation
to be modeled on a high-deductible health plan tied to a health savings account. MDWise, Anthem, and
Centenes Managed Health Services are the carriers for the program. HIP does not cover all the services that
Medicaid does and requires cost-sharing from participants toward the first $1,100 of care. The prescription
drug benefit does not cover branded drugs when a generic substitute is available. About 37,000 state residents
are enrolled in HIP, and the program is capped at 45,000.
Gov. Mike Pence has attempted to use some form of HIP for Indianas Medicaid expansion, but so far the
federal government has refused because the program does not meet the standard requirements for Medicaid.
In fall 2013, the Centers for Medicare & Medicaid Services approved a limited extension of HIP until the end
of 2014. As part of the agreement, Indiana decreased the maximum income eligibility level for HIP from 200
percent of FPL to 100 percent of FPL, and those residents who no longer qualified were encouraged to seek
coverage through the states health insurance exchange.
In May 2014, the governor proposed a plan, known as Healthy Indiana Plan 2.0, to apply for a waiver that
would allow the state to use Medicaid expansion funds to cover more residents in HIP. Healthy Indiana
Plan 2.0 would replace traditional Medicaid for all nondisabled adults ages 19 to 64 and includes three plan
options. HIP Link would provide premium assistance to residents who have access to employer-sponsored
insurance but cannot afford it. HIP Basic, for residents who earn up to 100 percent of the FPL, would be
similar to the states existing Healthy Indiana Plan but without the required premium contributions and
would include a limited prescription drug benefit. HIP Plus, a consumer-driven option for residents who
earn up to 138 percent of the FPL, would require monthly contributions to a health savings account and
includes dental and vision coverage and a comprehensive prescription drug benefit.
HIP 2.0 would provide insurance coverage for an additional 334,000 to 598,334 residents of Indiana with
incomes up to 138 percent of the FPL. Gov. Pence hopes to submit his proposal to the federal government
by the end of June 2014.

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Table 7-2:

Medicare
Total
Beneficiaries:

Percent of
Population:

Medicare
HMO:

Medicare
PPO:

Medicare
PFFS:

Other
Managed
Medicare:

Total MCOManaged
Medicare:*

Local Medicare

286,314

15%

13,526

55,635

1,150

15

25%

State Medicare

1,107,613

17%

29,067

208,952

9,090

1,134

22%

>>>

*Represents percentage of total beneficiaries.


Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Table 7-3:

Prescription Drug Plan


MA-PDP:

Stand-alone PDP:

Total PDP Penetration:*

Local PDP

55,057

147,398

71%

State PDP

193,920

581,238

70%

>>>

*Represents percentage of total beneficiaries.


Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

Indiana joins with Kentucky to form a single region for both stand-alone prescription drug plans and
Medicare Advantage plans with a prescription drug benefit.
Table 7-4:

Uninsured
Uninsured:

Percent of Population:

Local

258,411

13%

State

888,817

14%

41,146,909

13%

>>>

National
Source: HealthLeaders-InterStudy, as of Jan. 1, 2014.

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Pharmacy
Indianapolis relatively unhealthy population and strong supply of physicians bode well for pharmaceutical
sales. Numerous coordinated care initiatives in the market promote medication adherence and disease
managementthis also should boost prescription sales. However, high-deductible health plans are
becoming increasingly popular in Indianapolis, and greater cost shifting to employees by the regions large
employers could cause patients to seek less-expensive prescription drugs or forego care.
Factors that are favorable to pharmaceutical sales include the following:
I ndianas HoosierRx, the states pharmaceutical assistance program, helps pay the monthly Medicare
Part D premium up to $70 per month for seniors enrolled in Medicare Part D plans. The state also offers
a website that helps low-income, uninsured state residents get access to patient-assistance programs in
which they qualify for free, or nearly free, prescription drugs.
T
 he Indianapolis market has more physicians for its population size than the national rate, including
more primary-care physicians and more specialists (The Little Blue Book, January 2013). The state has
also recently expanded its scope of practice guidelines for physician assistants, which will provide more
patients with access to primary-care providers.
Indianapolis is a promising area for market expansion in treating asthma, multiple sclerosis, and
psoriasis, based on estimates that show relatively high percentages of untreated patients and residents
with prescription drug benefits (Decision Resources PatientFinder database).
Indiana ranked 41st in the 2013 Americas Health Rankings from the United Health Foundation.
Challenges include a high prevalence of smoking (24 percent of the population), high levels of air
pollution, and low immunization coverage among children.
I n the Indianapolis market, the rate of physicians using an EHR to e-prescribe is 45 percent in Marion
County, 66 percent in Hendricks County, and 97 percent in Shelby County (Office of the National
Coordinator for Health IT).
Factors that are unfavorable to pharmaceutical sales include the following:
M
 edication adherence for Indiana health plan members with diabetes, hypertension, dyslipidemia, and
depression is below average for all four conditions. Approximately 83 percent of prescriptions in Indiana
are dispensed as generic drugs (CVS Medication Adherence).
H
 amilton, Hendricks, and Boone counties in the Indianapolis market rank as the first-, second-, and
third-healthiest counties in the state, respectively, based on health factors in Indiana (2013 County
Health Rankings report, Robert Wood Johnson Foundation).
A
 bout 73.0 million prescriptions were filled in Indiana at a total value of $4.5 billion in 2011. About
11.2 prescriptions were filled per capita, versus the national average of 12.0, ranking the state 38th in
the nation on that measure (analysis of data by the Kaiser Family Foundation).
E
 nrollment in high-deductible health plans in the Indianapolis market is higher than the national
average, and all three of the largest health plans offer high-deductible plan options. Because these plans
require higher out-of-pocket costs for customers, they could undermine medication adherence and
encourage the use of less-expensive prescription drugs.
T
 he American Medical Student Association upgraded the Indiana University School of Medicines
grade from C to B for its conflict-of-interest policies for the pharmaceutical industry. Although the
schools policy is lacking in oversight of consulting and speaking, it includes a complete ban on gifts and
on-site meals, and a new requirement that mandates public disclosure of all conflicts of interest. The
school continues to tighten its policies through its Conflict of Interest Committee.

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A
 nthem Blue Cross and Blue Shield of Indiana, which has the largest health plan enrollment in the
Indianapolis market, has 100 percent of its members in four-tier plans.
I ndianas supply of nurse practitioners and physician assistants is much lower than the national average,
which could hinder patients access to care.
T
 he physician sector is highly integrated with the largest health systems, which could hinder
pharmaceutical representatives access to physicians in Indianapolis. Employed physicians typically
have less control over formulary decisions.

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Legislation
Table 9-1

YES

MARKET DRIVER

The 2014 legislative session convened Jan. 6, 2014, and adjourned March 13, 2014. The Affordable Care Act
remains unpopular among Indiana legislators, and continued attempts to create a state-run health insurance
exchange and expand Medicaid eligibility via legislation have failed. There also has been lobbying to increase
the scope of practice for nurse practitioners and physician assistants in Indiana, which could help offset the
predicted primary-care shortage.
Table 9-2:

Summary of Recent Legislation

Bill Name and Number

Description

Status and Date

Telehealth Program
(HB 1258)

Establishes a pilot program to provide telehealth services to patients in


Indiana without the establishment of an in-person relationship between
patient and physician; after the pilot phase, the Medical Licensing Board
of Indiana will assess whether to expand telemedicine laws in the state,
which currently allow telemedicine visits only if the patient and physician
have previously had an in-person visit

Signed by governor

Health Insurance Exchange


(HB 1356)

Would have required the department of insurance to create a state health


benefit exchange in Indiana

Died in committee

Affordable Care Act


(HB 1406)

Would have nullified the federal Patient Protection and Affordable Care Act
in Indiana

Died in committee

Biosimilar Drugs
(SB 262)

Allows a pharmacist to substitute an interchangeable biosimilar product


for a prescribed biological product if certain conditions are met; requires
a pharmacist to record the name and manufacturer of a biological
product no later than 10 days after it has been dispensed; requires the
board of pharmacy to maintain a link on its website to the current list
of interchangeable biosimilar biological products; requires written or
electronic prescriptions for biological products to comply with existing
prescription form requirements

Signed by governor

Insulin And Tramadol


(SB 285)

Would have added insulin to the definition of legend drug; would


have allowed insulin to be available for retail sale by pharmacies only to
individuals who possess prescriptions from certain practitioners; would
have designated Tramadol (Ultram) as a Schedule III controlled substance

Passed Senate, died in


House

Telemedicine
(SB 346)

Would have provided Medicaid reimbursements to pharmacists who


provide medication therapy management services to patients via
telemedicine

Died in committee

Alternative Medicaid
Expansion
(SB 370)

Would have required the Office of the Secretary of Family and Social
Services to apply for a Medicaid state plan amendment or a demonstration
waiver from the U.S. Department of Health and Human Services, to allow
the Office of the Secretary to purchase, for residents with annual incomes
of up to 138 percent of the federal poverty level, coverage by a qualified
health plan through the states health insurance exchange

Died in committee

March 2014

January 2014
January 2014
March 2014

February 2014

January 2014

January 2014

Source: HealthLeaders-InterStudy, 2014.

2014 Market Overview

CITY: INDIANAPOLIS

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Employers
Table 10-1

NO

MARKET DRIVER

Sector Outlook
Premium increases and the requirements of healthcare reform are causing employers to seek greater control
over their healthcare spending. Narrow networks, defined-contribution benefit plans, and private exchanges
are among the approaches being tested by employers, and transparency tools are in high demand. Many
smaller employers likely will join multi-employer, on-site clinics since teaming up makes the concept
affordable, which will increase access to care for patients across Indianapolis.

Economic Profile
Table 10-2:

Indianapolis Economy Highlights

Month/Year

Market unemployment rate:

National unemployment rate:

March 2013

7.5%

7.5%

March 2014

5.6%

6.7%

Indianapolis top three employment sectors


Trade, transportation, and utilities
Professional and business services
Education and health services
Source: U.S. Bureau of Labor Statistics

The Indianapolis market is home to four Fortune 500 companies, including WellPoint, Eli Lilly,
Cummins, and Simon Property Group. The regions large health systems, including IU Health and St.
Vincent Health, are also among the markets largest employers.

Highlights:
Plan design/premiums:
Brokers in the market report that large employers in Indiana are seeing premium increases of about
9 percent for 2014, which is slightly higher than in 2013. As employers seek to contain these cost
increases, we likely will see more groups shifting to self-insured plans.
Local brokers say that consumer-driven health plans are becoming increasingly popular among
employers, and the trend is expanding to smaller employers looking to decrease their costs. There were
145,038 covered lives in consumer-driven health plans in Indianapolis as of January 2013, accounting
for an estimated 13.0 percent of commercial enrollees compared with 12.3 percent nationally
(HealthLeaders-InterStudy data). Carriers with significant CDHP enrollment in Indianapolis include
Anthem Blue Cross and Blue Shield, UnitedHealthcare, and Cigna.

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In November 2013, Anthem launched a new partnership with the Indiana Manufacturers Association
to provide healthcare benefits to small employers. Manufacturers with 50 or fewer workers who join a
group insurance trust formed by the Indiana Manufacturers Association will have access to Anthems
broadest network plan and will be able to effectively avoid the community rating rules mandated by
the Affordable Care Act (Indianapolis Business Journal, accessed Dec. 18, 2013).
Health insurance exchanges:
Using technology developed by Bloom Health, Anthem launched Anthem Health Marketplace, an
online exchange for defined-contribution benefit plans, on Jan. 1, 2013, for employers with more than
50 workers. The exchange opened to employers with two to 50 employees July 1, 2013. Employees are
given a fixed sum by their employer to purchase medical benefits and can then choose from a pool of
health plans on the exchange. Defined-contribution benefit plans are attractive to employers because
they can better predict and control their healthcare costs. Market experts report that employers
are showing increased interest in defined-contribution benefit plans and participating in private
exchanges, especially since the launch of the public health exchange has been so problematic.
On-site clinics/wellness initiatives:
The on-site clinic industry in Indianapolis has seen explosive growth in recent years, and employers
are eager to embrace the concept in order to decrease acute-care utilization. Indianapolis-based
companies that have opened dozens of clinics for employers in Indiana include Activate Healthcare,
OurHealth, Novia CareClinics (acquired by Wisconsin-based QuadMed in October 2013), and
RepuCare Inc. All of the areas major health systems also offer on-site clinics and are marketing this
service to employers.
Recently, multi-employer clinics have become a popular option for businesses that are interested in the
concept but have too few employees or workers who are too spread out geographically to support one.
Activate Healthcare and Novia CareClinics both have multiemployer clinics, and OurHealth plans to
open a network of seven clinics around Indianapolis in 2014. OurHealths service, known as myclinic
by OurHealth, will be offered to smaller employers, and employees can visit any of the seven locations
that are most convenient for them.
Marion County was one of eight communities chosen to participate in the CDCs National Healthy
Worksite Program, and 13 employers with a total of 2,100 employees have been selected to participate
through September 2014. The employers, which include the Indiana State Department of Health,
Buchanan Group, TKO Graphics, and Med Shield, will receive assistance creating comprehensive
worksite wellness programs for their employees.
Major employers:
Effective Jan. 1, 2014, Kroger eliminated health insurance coverage for employees spouses in
Indiana. The new union contract allows employees children to remain on the plan, and spouses
can still obtain dental and vision coverage. Many of these spouses will likely obtain coverage on
Indianas health insurance exchange. This tactic could be replicated by other large employers
looking to decrease their costs.
Transparency:
Ten of Indianas largest employers, including the State of Indiana, Cummins, CNO Financial Group,
and IU Health, have begun using a software tool, developed by San Franciscobased Castlight
Health, that provides employees with cost and quality information about providers. The Indiana
database includes the participating employers claims data that companies can analyze for trends,
including claims data from Anthem, which has a significant portion of enrollment in Indiana.
Experts in the market predict that this transparency tool could alter consumer healthcare spending
and could be a game changer in the Indiana market, simply because of the sheer size and clout of
the employers involved.

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Business Coalitions
The Employers Forum of Indiana is an employer coalition that includes physicians, hospitals, insurers, and
public officials. It works to address the challenges of healthcare delivery in the market. Initiated by managed
care consulting firm Healthcare Options Inc., the group helped create Quality Health First, a program that
generates quality reports on medical groups. WellPoint and UnitedHealthcare have both participated and paid
bonuses to the best-performing physicians, but WellPoint discontinued its bonus payments at the end of 2013.
The Indiana Employers Quality Health Alliance, a member of the National Business Coalition on Health,
was established in 1994 to address employer concerns about healthcare cost and quality. It represents more
than 50,000 employees, of both large and small employers, and is expanding statewide.
Better Healthcare for Indiana promotes community collaborations to improve health and reduce the cost
of care in communities in Indiana. The program is gaining traction among employers in Terre Haute,
Logansport, Bloomington, and Lafayette. By banding together with employers, the organization hopes to
exert influence on local providers and insurers.
National CooperativeRx has a presence with self-insured employers in Indiana, along with eight other states.
The coalition is a subsidiary of WisconsinRx, a nonprofit, member-owned cooperative of employers and
organizations. National CooperativeRx was created when employers and labor organizations collaborated
to control overall drug spending, make better decisions with improved data, and gain access to transparent
information about their pharmacy management. National CooperativeRx has 450 private employers, labor
coalitions, and public plans as members.

2014 Market Overview

CITY: INDIANAPOLIS

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