Indiana’s governor, Mike Braun, has signed a groundbreaking bill that will revoke the non-profit status of charity hospitals if they continue to charge high prices. This legislation, the first of its kind in the United States, was prompted by public outcry following a Guardian investigation that revealed how a major Indiana non-profit hospital system raised prices after acquiring its competitors. The system, Parkview Health, faced criticism from both political parties, leading to legislative action to address the issue.

The new law requires non-profit hospitals in Indiana to align their prices with a state benchmark determined by the office of management and budget by 2029. The bill’s author, Representative Martin Carbaugh, anticipates immediate pressure for hospitals to lower prices, with potential average reductions as significant as 40% for major hospital systems like Parkview. Small business owners, like Doug Allen, who have struggled with high healthcare costs, welcome the change, hoping it will alleviate financial burdens on employees and reduce reliance on payment plans.

While Parkview Health has expressed commitment to reducing healthcare costs, the Indiana Hospital Association has raised concerns about the law’s impact on hospitals’ financial stability amidst rising cost pressures. Nevertheless, Carbaugh sees Indiana’s legislation as a potential model for other states grappling with exorbitant healthcare prices, aiming to lead the charge in addressing this nationwide issue. With healthcare spending in the US surpassing that of other wealthy nations, the move towards price regulation in Indiana could set a precedent for reform in the healthcare sector nationwide.