Continued Hospital Expansions Raise Cost Concerns in Indianapolis

Originally published by the Center for Studying Health System Change (HSC) as Community Report No. 2, June 2005.

Hospital Expansion and Competition Drive Cost Concerns in Indianapolis

In January 2005, HSC researchers visited Indianapolis as part of the Community Tracking Study, interviewing more than 95 health care market leaders. Intensifying competition among hospital systems and the entrepreneurial activities of physicians were raising questions about the affordability of Indianapolis's health care system. Hospital competition continued to fuel facility expansions, but providers were also collaborating on clinical data-sharing initiatives that offered promise for improving care delivery.

Two years earlier, hospitals and medical groups had been busy developing new specialty facilities and services while health plans and employers took few steps to check rising costs. Since then, hospital competition had continued to drive facility expansions, but the juxtaposition of aggressive capital spending with emerging collaborative quality initiatives raised both concern about costs and enthusiasm for potential quality improvements. Health plans and employers remained largely on the sidelines of cost containment, leaving the Indianapolis market with limited checks on provider spending decisions.

Sources and Further Reading

Mays, Glen P., Thomas Bodenheimer, Laurie E. Felland, et al., "Continued Hospital Expansions Raise Cost Concerns in Indianapolis," Community Report No. 2, Center for Studying Health System Change (June 2005).