Press Release

As pandemic crisis takes toll, IU Health outlines plans to improve Hoosier health

February 25, 2022

INDIANAPOLIS – Indiana University Health has approved a major funding plan for community health initiatives across the state that will complement a renewed commitment to price affordability for its patients.

The funding plan, recently approved by the board of IU Health, will innovate operations and care models at IU Health and support community health initiatives and education and workforce development programs statewide, including neighborhoods around its downtown Indianapolis campus.

The new, multi-year funding plan aligns with a far-reaching commitment by IU Health to bring its hospital pricing to the national average for commercial insurance by the end of 2025 as a critical step in reducing healthcare costs in the state.

The funding commitments aim at reversing Indiana’s lagging health indicators that rank it one of the nation’s least healthy states at a time when social disruption from the ongoing COVID-19 pandemic has made progress harder to achieve. Now in its second year, the pandemic has resulted in over 21,700 deaths in Indiana, infected over 1.6 million Hoosiers and led to negative social, psychological, and economic consequences for the state, with a disproportionate effect on the vulnerable.

The IU Health board has committed to investing $500 million for health-related community development in the neighborhoods surrounding the downtown Indianapolis campus, plus $400 million to support innovation advancing the strategic healthcare priorities of IU Health and its key partners. An additional $100 million also will be contributed to the IU Health Community Impact Investment Fund. The set-aside funds will be invested over multiple years and IU Health is in the early stages of partnering with stakeholders to allocate the funds in the most impactful way.

The 15-member board of IU Health, made up of leading healthcare, business, civic and religious leaders and educators, feels strongly that the state’s largest healthcare system needs to leverage new technology and more resources to advance its core mission of making Indiana a healthier state, while pursuing its affordability pledge, said board chair J. Scott Davison, who is chairman, president and CEO of OneAmerica in Indianapolis. “The ongoing pandemic and the toll it’s taken on Indiana have made IU Health’s mission all the more urgent,” Davison said. “The funding plan will support IU Health as it responds to the critical health needs of Indiana, working closely with partners in government, education and local communities.”

IU Health President and CEO Dennis Murphy said IU Health’s commitments “will help Hoosier families at a time of unparalleled need. The new initiatives will not only reduce costs for patients, payers and taxpayers through our pricing affordability plan, but improve our communities through significant investments in public health aimed at keeping people healthier and out of the hospital. With its outstanding care providers, powerful brand and culture, strong balance sheet, and unique relationship with the IU School of Medicine, IU Health is well-positioned for the task. But it will take working together, with our many partners, to meaningfully change the trajectory of Indiana’s poor public health statistics. We will also need to focus on the other drivers of healthcare costs – such as low public health funding and cigarette tax rates, utilization rates of health care services, insurance costs -- if we are serious about controlling healthcare costs in Indiana. We are taking these steps as a sign of leadership. Patients are counting on us.“

The new funding commitments come after a year that stretched IU Health and its workforce as never before. Hospitals filled to capacity with record numbers of COVID-19 and other critically ill patients. To cope with surges in COVID-19 and new variants, IU Health turned to clinical and operational innovations to expand bed and emergency room capacity and bring more clinical expertise to the bedside, while standing up COVID-19 testing labs, mass vaccine clinics, masking campaigns and educational messaging. Against the headwinds of the pandemic IU Health achieved first-year goals under its price affordability plan to relieve the impact of rising healthcare costs on consumers.

A year of challenge

IU Health employed new care models and initiatives in 2021 to maintain a high level of patient care as the inpatient census across the system and patient acuity levels reached record highs due to the pandemic.

  • Surge planning. As in 2020, significant funds were redirected to new needs, including personal protective equipment, expanded ICUs and extra frontline staffing.
  • Hospital at Home. More than a dozen departments collaborated to create one of the largest hospital-at-home programs in the nation. It has treated more than 1,600 patients at home since 2020, giving patients a safe option for acute care in their homes and freeing up hospital beds for the most critically ill.
  • I Can Help app. A new app allows team members to volunteer to fill needed clinical and non-clinical shifts and relieve exhausted staff. Team members stepped up, with more than 10,000 submissions to help.
  • Vaccine clinics. IU Health operated critically needed vaccine clinics during the pandemic, including mass vaccinations at the Indianapolis Motor Speedway, Indiana State Fair and Children’s Museum of Indianapolis, while also reaching out to populations in urban and rural areas lacking easy access to healthcare.
  • Coronavirus testing lab. One of the largest coronavirus test labs in the state has performed nearly 1 million tests since opening early in the pandemic. The lab flexed its capabilities to handle testing of all athletes, staff and support personnel during the NCAA men’s basketball tournament held in Indiana in March.
  • Virtual care. Providers embraced telemedicine and other virtual links during the pandemic to care for patient needs remotely. More than 400,000 virtual visits were completed in 2021.
  • Military assistance. National Guard and U.S. Navy teams were deployed to work side-by-side with team members in every hospital in patient or support roles, providing much-appreciated help during difficult periods of the pandemic to serve hospitalized patients.

Focus on quality, innovation, diversity

Care teams stayed focused throughout the crisis, nearly meeting annual targets for in-hospital patient harm events and the systemwide mortality rate despite severe disruptions from COVID-19 and a national trend of healthcare-associated infections increasing during the pandemic. Surveys showed high satisfaction among the 1 million patients seen each year within the IU Health system.

IU Health continued to drive medical innovation and reinforce its reputation as a destination healthcare provider with cutting-edge care. One notable example: With the population health team, the Cardiovascular Institute launched a first-of-its-kind heart attack prevention program that taps new technology to measure early signs of coronary artery disease leading to heart attacks.

IU Health made significant investments in a workforce buffeted by the pandemic. Recruitment was prioritized and expedited to allow a record pace of new hiring, premium pay and bonuses were offered for critical positions, while minimum base pay was raised to $16 an hour. A majority of the 36,000 highly skilled professionals received pay raises. A chief health equity officer position was created and filled, putting focus on equitable patient access, experiences and quality outcomes.

For the 24th consecutive year, IU Health Medical Center was ranked among the nation’s top adult hospitals by U.S. News & World Report and the only nationally ranked hospital in Indiana. Five specialties rated high-performing or among the nation’s top 50: ear nose and throat, gastroenterology, geriatrics, neurology & neurosurgery and urology. Riley Hospital for Children was the only nationally ranked children’s hospital in Indiana by U.S. News, earning national rankings in nine pediatric specialties.

Operational and capital investments

IU Health marked the completion of three significant, multi-year capital projects under a long-term plan to modernize its statewide hospital facilities to better serve its diverse urban, suburban and rural patient base.

  • A regional academic health center opened in Bloomington affording an expansion of medical education and research programs and a new hospital bringing cutting-edge care for south-central Indiana.
  • A new maternity tower at Riley Hospital for Children opened, offering comprehensive maternity and newborn health services for Central Indiana parents, with one of the largest neonatal intensive care units in the country and capacity of over 38,000 deliveries a year.
  • An expansion of IU Health West Hospital in Avon added beds and operating room space to serve the growing suburbs of Indianapolis.
  • Infrastructure and site preparation work began for an expanded medical campus in downtown Indianapolis that will be home to a consolidated adult academic health center. It will open for patients in late 2026, ushering in a new era of world-class care to future generations of Indiana residents. A $500 million allocation from IU Health will fund opportunities for additional health-related and neighborhood development around the growing campus in coming years, making the area a medical hub for Indiana.
  • An Integrated Behavioral Health Urgent Consult program was rolled out to all 86 primary care practices and on-site clinics across the state, to serve growing numbers of patients facing behavioral health issues. A similar virtual model was started to offer tobacco cessation services for primary care patients who have expressed a desire to quit smoking.

The investments further IU Health’s nonprofit mission of providing clinical care, research and education as Indiana’s most comprehensive healthcare provider, in a unique partnership with Indiana University School of Medicine.

Affordable care plan

IU Health aims to be a leader within Indiana’s provider community in addressing concerns over the rising cost of healthcare. “We have completed the first year of our multi-year price affordability plan and, in spite of inflationary pressures, we remain committed to being at national average prices by the end of 2025.” said Jenni Alvey, senior vice president and chief financial officer.

The pricing affordability plan, when accounting for all payers and services, held overall prices flat from 2020 to 2021. Outpatient rates for many common services, such as radiology, labs and drugs, were reduced by $100 million in 2021 with similar reductions planned for 2022. The multi-year plan should bring more than $1 billion in savings for healthcare consumers after factoring in inflation, as IU Health adjusts its prices to national parity by the end of 2025.

“This is a carefully crafted plan that seeks to balance our desire to reduce costs with our ability to continue to provide healthcare services to all patients regardless of ability to pay. This plan also seeks to ensure we continue to reinvest in our team members, facilities and support structures to provide the best individualized care to patients,” Alvey said.

IU Health has refined its approach to meeting price transparency requirements, offering patients and the public clear and easy-to-understand information about prices. Patients can call, email or go online to receive detailed estimates of out-of-pocket costs for scheduled services prior to visits. Patients also benefit from consolidated billing statements, zero-interest payment plans and flexible payment arrangements.

Community benefit

IU Health provides more community benefit than any other health system in Indiana. In 2020, total community investment amounted to $903 million, including $81 million in charitable financial assistance, as well as education for health professionals, clinical research and outreach initiatives. A Community Impact Investment Fund established in 2018 with $100 million will receive an additional $100 million recently approved by the IU Health board, allowing the fund to make an even broader impact improving the health of Hoosiers. Annual grants from the fund in 2021 totaled $4.3 million in support of early learning programs, workforce training and emergency housing for at-need children and adults across the state. Other community benefit programs and grants:

  • Ivy Tech Community College was granted $8.75 million to help expand enrollment of nursing students and address Indiana’s critical shortage of nurses.
  • A fellowship program with Indianapolis Public Schools to support health sciences education at Crispus Attucks High School in Indianapolis got up and running with the selection of its first class of fellows. The program represents an investment in the next generation of healthcare providers -- upon graduation, fellows receive job offers and tuition assistance from IU Health.
  • With community partners and funding from the Lilly Endowment, IU Health launched the Mosaic Center for Work, Life and Learning in Indianapolis, which will offer workforce coaching, training and support to improve the livelihoods of individuals and families facing financial insecurity.
  • The Center for Leadership Development received $2 million to reach more Black youth across Central Indiana to help them thrive in their life, academics and career.

Financial results

Highlights for IU Health’s 16-hospital system, which also includes surgery and urgent care centers, five physician networks and a health insurance company:

  • Operating revenue grew 11% over 2020 to $7.87 billion, while operating expenses rose 19.6% to $7.71 billion, driven largely by labor costs.
  • Operating income fell 75% from 2020 to $161 million. Total earnings, including investment gains from favorable financial markets, also fell, to $861.5 million from $1.11 billion.
  • Increased volumes were seen in most key patient service categories, including hospital admissions, surgery cases, ER visits and radiological exams. Patient demand rose after the lapse of a state-ordered delay in nonessential surgeries and procedures in 2020, and due to an influx of COVID-19 patients.
  • IU Health maintained AA bond ratings.

About IU Health

Indiana University Health is Indiana’s most comprehensive healthcare system. An academic health center, IU Health provides leading-edge medicine and treatments.

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