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www.hl-isygateway.com
Indianapolis
Counties Covered:
Boone, Brown, Hamilton, Hancock, Hendricks,
Johnson, Madison, Marion, Morgan, Putnam, and
Shelby
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
CORPORATE OFFICE
One Vantage Way, B-300
Nashville, TN 37228
Toll free: 1-855-380-4850
www.hl-isy.com
CITY: INDIANAPOLIS
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Updated
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
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.
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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.
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Indianapolis Market
Analysis for Indianapolis Healthcare Market
Market Indicators
Table 3-2:
Market
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Table 3-3:
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
Table 3-5:
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
Physician
segment
Health plan
segment
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Table 3-9:
Health Systems/Hospitals
Name
Total # of Hospitals
Total # of Beds
Market Share*
IU Health
1,947
34%
1,406
22%
1,136
20%
Table 3-10:
Physician Organizations
Total # of Physicians
Name
Suburban Health Organization
2,687
IU Health Physicians
1,000+
750
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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%
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%
Table 3-12:
HMOs*
Plan
WellPoint**
Table 3-13:
PPOs*
Plan
Table 3-14:
POS*
Plan
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MCO-Managed Medicaid*
Table 3-15:
Plan
Enrollment
Market Share
85,291
39%
WellPoint
84,955
39%
Centene
48,887
22%
Enrollment
Market Share
UnitedHealth Group
20,371
29%
Humana
15,422
22%
12,123
17%
MCO-Managed Medicare*
Table 3-16:
Plan
Major Employers
Table 3-17:
Name
# of Employees
State government
68,208
Federal government
11,368
Allison Transmission
9,670
9,668
City of Indianapolis
8,889
Indiana University
7,466
7,351
6,969
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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YES
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:
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%
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:
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.
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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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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:
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.
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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:
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.
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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.
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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.
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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
Indianapolis
545
Indianapolis
460
Indianapolis
451
Indianapolis
373
Eskenazi Hospital
Indianapolis
327
Anderson
295
Indianapolis
228
Indianapolis
222
Anderson
207
Carmel
189
Indianapolis
182
Franklin
175
Danville
160
Riverview Hospital
Noblesville
156
Indianapolis
150
Avon
142
Carmel
124
Indianapolis
120
Martinsville
112
Greenfield
112
Indianapolis
107
Lebanon
90
Major Hospital
Shelbyville
80
Indianapolis
78
Mooresville
77
Indianapolis
58
Fishers
50
Indianapolis
42
Fishers
42
Elwood
25
Greencastle
25
Carmel
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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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.
IU Health Physicians
Table 5-3
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.
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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.
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.
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Primary-care physicians: 70
Mid-level providers: 15
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.
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Health Plans
Table 6-1
YES
Table 6-2:
MARKET DRIVER
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
>>>
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:
MCO:
Enrollment:
Market Share:
18,866
80%
2,993
13%
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
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.
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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
>>>
Table 6-8:
Government-Sponsored Enrollment
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
Local
Statewide
854
>>>
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.
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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
Table 6-10:
Government-Sponsored Enrollment
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
Local
20,371
Statewide
67,482
1,671
>>>
Description
For-profit UnitedHealth Group has most of its enrollment in the Indianapolis market in its
UnitedHealthcare plans.
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Table 6-11:
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:
PBM Provides
Consultations on Benefit
Design?
Health Plan
PBM(s)
No
Yes
Cigna
No
N/A
No
Yes
UnitedHealthcare
Table 6-13:
Percent Spent
on Nonpreferred Brands
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%
>>>
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%
>>>
Table 7-3:
Stand-alone PDP:
Local PDP
55,057
147,398
71%
State PDP
193,920
581,238
70%
>>>
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:
Description
Telehealth Program
(HB 1258)
Signed by governor
Died in committee
Would have nullified the federal Patient Protection and Affordable Care Act
in Indiana
Died in committee
Biosimilar Drugs
(SB 262)
Signed by governor
Telemedicine
(SB 346)
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
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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:
Month/Year
March 2013
7.5%
7.5%
March 2014
5.6%
6.7%
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.
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