A new report shows Indiana hospital systems are struggling financially, and it's not just rural facilities.
Johnson Memorial Health said last year was the worst it's ever had financially with the hospital losing millions of dollars.
The CEO said if this continues to happen, he doesn't see the light at the end of the tunnel for the hospital.
"What I'm afraid of is even though 2024 is a little better long term, I'm not sure we are living in a sustainable model when it comes to healthcare reimbursement," said President and CEO Dr. David Dunkle.
Dr. Dunkle said Johnson Memorial Health is dipping into its savings.
He attributes the financial strain to inflation and a lack of insurance reimbursements from medicaid and medicare.
"People don't realize, though we're a business, 65% to 70% of our business is governmental payers. That's Indiana Medicaid, and federal Medicare," said Dr. Dunkle.
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He said, hospitals receive about 57 cents for ever dollar for approved Medicaid claims and 82 cents for Medicare.
While costs are shifted to those with private insurance, it's not enough to make up for the roughly two million Hoosiers who rely on government insurance services.
"We're getting paid less than ever. The number of denials has increased significantly, especially in the last year. It's ridiculous that that we provide the care and then beg the insurance companies to pay us 90 days later," said Dr. Dunkle.
A new study released this month from Kaufman Hall shows last year, Indiana hospitals lost $731 million in income.
"The magnitude of the losses are substantial," said Indiana Hospital Association President, Brian Tabor. "Indiana hospitals, again as a whole had less than a 1% margin positive point. And quite frankly, less than 1% margin is just not enough to reinvest and do the things that hospitals need to do to keep technology up to take care of patients. So, we have a long way to go."
Tabor said at least seven to eight hospitals across the state are on the verge of closing or cutting services. On top of the dozen that have already cut staff, labor and delivery units, or closed within the past four years.
"I do fear that we are on the threshold of a big jump in additional closures. So, that could be more of those OBGYN units, but actually hospitals," said Tabor.
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"Across the state, I know lots of hospitals are struggling. And what happens is, we're not getting more revenues. So, what do you do you cut expenses? How do you cut expenses? That's people. That's services," said Dr. Dunkle.
Tabor said lawmakers need to approve a change for hospitals to survive.
"The statehouse, we need help. We need to change the hospital assessment fee. We need to be sure that payers are practicing medicine, that they're allowing hospitals to practice medicine," said Dr. Dunkle.
IHA said to be clear, patients will not be turned away regardless of their insurance but hospitals across the state are seeing a 10% increase in medical supply costs. That includes hospital beds, medication and other supplies, which is adding to the financial strain.
"I'm very disappointed this last year, we gave our lowest cost of living increase ever to our employees. And I'm disappointed that we couldn't do more. But in a year, we lost money as an organization. We we still believe in reinvesting our employees, obviously, I just wish we could have done at a higher level," said Dr. Dunkle.
