Honoring the Health Care Legacy of Sen. Richard Lugar

Sen. Richard Lugar, right, and John C. Render, retired IHA general counsel, discussed the state of Indiana health care during the IHA Annual Membership Meeting.

On Nov. 1, IHA honored Sen. Richard Lugar with the John C. Render Award for Health Policy. The award was created and named for John C. Render—a founding partner of Hall, Render, Killian, Heath & Lyman, the largest health care firm in the country—and is presented to those individuals who have had a significant influence on health care policy affecting Indiana hospitals.

According to Render, over the course of a storied five-decade political career spent serving Indiana, the country and the world, Lugar’s impact on health care in Indiana is often overlooked.

“Many of Senator Lugar’s accomplishments, such as his work on nuclear disarmament and world hunger security, are very well known because he’s an international figure and deservedly so,” Render said. “Sometimes, because of that, some of his accomplishments in Indiana may have been overlooked. I’m humbled that an award that bears my name can be used to honor all he’s accomplished for health care in Indiana.”

A CHAMPION OF WESTVIEW HOSPITAL

Indeed, Lugar’s legacy in Indiana includes a number of milestone achievements that have significantly improved the health and well-being of Hoosiers. During his time as mayor of Indianapolis from 1968 to 1976, Lugar was instrumental in establishing Westview Hospital, the city’s first osteopathic hospital.

“I enjoyed an opportunity to make certain that the west side of Indianapolis—a neglected quarter in the overall hospital planning at the time—would see the building of a great hospital that ensured the continuation of osteopathic services in Indianapolis and provided enormous encouragement to citizens on the west side,” Lugar said.

Render believes that this achievement had a ripple effect throughout Indianapolis that extended beyond the patients Westview treated into higher education.

“You have to wonder if Marian University would have been able to launch and sustain its College of Osteopathic Medicine if that hospital had not been approved,” Render said.

MEDICARE GEOGRAPHIC RECLASSIFICATION

Render, who served as IHA’s general counsel from 1971 to 2017, began working closely with the senator and his staff in 1977 during Lugar’s first term in the Senate.

“From the very beginning we were working on two main issues: reasonable payment—trying to ensure that Indiana hospitals received fair and improved payment from Medicare and Medicaid—and addressing the health care personnel shortage, particularly in rural areas,” Render said.

In 1983, Congress passed the Tax Equity and Fiscal Responsibility Act, which established the Prospective Payment System to provide reimbursement for acute hospital inpatient services. In order to establish that system, government officials had to predict a hospital’s cost and determine a reasonable per-case reimbursement. They divided hospitals into “rural” and “urban” based on the Census Bureau’s definition of a metropolitan statistical area.

There was only one problem: hospitals in counties adjacent to one or more metropolitan areas—like Henry Community Health in New Castle—received the lower rural rate despite the fact that their operating costs were on par with those of urban hospitals.

“This problem was presented to a number of representatives in Washington, but Senator Lugar was the one who took the time to understand the inequity of the issue and took action to correct the problem,” said Jack Basler, former CEO of Henry Community Health.

Lugar, working with Sen. Donald Riegle Jr. of Michigan, authored an act that allowed these hospitals—two in Indiana and more than 50 across the country—to be reclassified as “urban.”

“It’s safe to say that had he not taken action, a large majority of those hospitals would not be in existence today,” Basler said. “Henry Community Health has benefited in the amount of about $1 million per year since the late ‘80s as a result of our reclassification.”

“The efforts of Senators Lugar and Riegle in 1987 not only fixed a specific problem for over 50 rural hospitals in 1987, but also led to the whole system of Medicare reclassification established in 1989 and still substantially in place today,” Render said. “Typically, over 500 hospitals are reclassified each year as part of this system.”

THE RICHARD G. LUGAR CENTER FOR RURAL HEALTH

In addition to helping rural hospitals receive proper reimbursement, Lugar has been instrumental in addressing the personnel shortages that plague rural providers. In 2006, the Midwest Center for Rural Health at Union Hospital in Terre Haute was renamed the Richard G. Lugar Center for Rural Health to honor the senator’s efforts to bring qualified physicians to underserved areas.

“It was an especial honor to assist those in the western counties of Indiana as the Lugar Center for Rural Health was established,” Lugar said. “It attracted young men and women to become doctors who would serve in many counties of western Indiana and eastern Illinois where perhaps only one doctor remained.”

“The senator continues to be a tremendous champion in advancing rural health,” said Hicham Rahmouni, executive director of the Richard G. Lugar Center for Rural Health. “I trust the ongoing efforts and work of the Richard G. Lugar Center for Rural Health may serve as a small illustration of the impact Senator Lugar has had in this realm.”

Similarly, IHA hopes that the John C. Render Award for Health Policy may serve as a symbol of gratitude on behalf of all Indiana hospitals for the transformative work that Lugar has accomplished over the course of his career.

“I am deeply honored to be recognized by the Indiana Hospital Association,” Lugar said. “I’m inspired to continue to serve Hoosiers who are seeking better health for themselves and their families, and I’d like to thank IHA members for the tremendous boost to the health and happiness of Indiana that their leadership has given.”