Column: IU Health can afford a price freeze given its profits and executive payouts
IU Health’s recent announcement of a price freeze comes more than three years after the first public revelation of its outrageous profit margin. IU Health’s initial response to the revelation provides important context for understanding the significance of its promised price freeze.
The October 5, 2018, Indianapolis Star featured an article about independent research commissioned by a group of Indiana business owners who were concerned about the unsustainably high cost of Hoosier healthcare. The results showed that IU Heath’s corporate profits were far higher than those of comparable healthcare corporations despite IU Health’s unnecessarily inflated operating costs. The study revealed that IU Health was using accounting procedures that obscured the excessive corporate profit margin.
Hicks: IU Health could freeze prices for 40 years before it exhausted its accrued profits
The article included the following response from Ryan Kitchell, Chief Administrative Officer of IU Health: “Pressures are increasing on hospitals to reduce costs and restrain pricing, making it more difficult to maintain operating margins. IU Health also provides $250 million a year in uncompensated care, more than any other hospital system in the state. To cover the cost of that care, the hospital must pass on the cost to commercial insurers and those whom they cover.”
Kitchell did not explain why IU Health needs an “operating” margin two to three times larger than most nonprofit hospitals. Nor did he disclose whose interests are thereby served. Rather he focused on the difficulty of maintaining such a large profit margin, regardless of who profits from it. (Kitchell personally extracted over $7,600,000 from IU Health between 2014 and 2019, according to IRS filings available in GuideStar.)
Kitchell’s casual reference to uncompensated care is deceptive. Of course IU Health provides more uncompensated hospital service than any other Indiana hospital system. IU Health was created for the expressed purpose of dominating the regional market for lucrative hospital services. To that end, Indiana University medical schools’ three teaching hospitals were co-opted to serve as the foundation of a highly profitable healthcare empire that currently controls 16 Indiana hospitals and 8 urgent care facilities. The majority of uninsured Hoosiers have no choice other than IU Health when they are in need of emergency, life-saving medical treatment.
Join the conversation: How to submit a letter to the editor or guest column to The Herald-Times
Kitchell’s touting of uncompensated care is particularly maddening in light of IU Health’s forced forfeiture of over $10 million to settle a federal lawsuit revealing overwhelming evidence of a corporate conspiracy to defraud Medicaid by billing for standard medical services that were withheld from impoverished pregnant women and their unborn children.
Kitchell left IU Health in 2019 to “pursue other opportunities,” but he is highly regarded for having developed a business model that amalgamates the healthcare services of thousands of doctors at over 100 locations within a multi-corporate structure designed to maximize tax-free revenue from every encounter with every potential “medical care consumer.”
IU Health is a multibillion-dollar corporate conglomerate that intertwines taxpayer-funded and tax-free healthcare agencies with for-profit corporations. It is governed by an oligarchy of business insiders and top-tier medical moneymakers whose financial interests are interconnected through their positions as executives and board members of over 100 contractually linked corporate entities, including investment firms that have over $1 billion stashed in offshore tax havens.
Kitchell’s 2018 public statement about IU Health’s outrageous profits reflects an entrenched corporate culture of executive entitlement to evade inconvenient truths about critical issues. However pretty a picture IU Health’s managers may paint with their multi-million dollar advertising budgets, the public should pay attention to what they do, not what they say.
Frank Miller is a concerned citizen who lives in Monroe County.
This article originally appeared on The Herald-Times: Columnist: Corporate conglomerate IU Health can afford price freeze
