IU Health sees Q2 improvement as pandemic pressures ease
July 28, 2022
INDIANAPOLIS – Indiana University Health realized operating income of $21 million in the second quarter, a notable improvement from the operating loss of $29.8 million in the first quarter, as financial stresses from the COVID-19 pandemic lessened. However, expenses remain elevated as IU Health continues to invest heavily in its team members and patient care during a time of workforce disruptions, labor shortages, and strong patient demand following periods of delayed care.
The second-quarter revenue of $1.99 billion was comparable to revenue of $1.96 billion in the same quarter last year. For the first six months, IU Health posted an operating loss of $8.54 million on revenue of $3.91 billion, compared to a gain of $414 million on revenue of $3.81 billion in the first half of last year. Expenses rose to $3.92 billion in the first half from $3.40 billion a year ago.
Financial results were impacted by higher costs for labor, supplies and drugs, and the commitment by IU Health to reduce the cost of care for Hoosiers. This year is the second year of IU Health’s five-year pricing plan that delivered more than $120 million in savings for Hoosiers in 2021 and is expected to bring more than $1 billion in savings over the five years.
“After a challenging first quarter, IU Health has seen improvement in financial outcomes even as we continue to navigate our commitment to care affordability and invest in our team members during a time of economic and social stresses,” said Jenni Alvey, senior vice president and chief financial officer. “Even with the headwinds of higher inflation, IU Health remains committed to its plan to hold prices flat while considering all payers and services. This plan will get us to national averages by 2025.”
Over the six months compared to last year, IU Health reported hospital admissions were essentially flat, while ER visits rose 8.2% and surgery cases declined by 1.8%.
When including investments and other nonoperating income, IU Health reported a total loss for the six months of $929.6 million, largely due to declines in financial markets. The loss compares to a gain of $884 million in the first half of 2021.
Despite this year’s financial challenges, IU Health continues to invest in planned capital projects and make meaningful contributions to the communities it serves.
IU Health’s notable capital project investments, undertaken to improve the delivery of care to patients, include the construction of a new downtown Indianapolis hospital already underway, and a planned expansion of IU Health Saxony Hospital in Fishers.
IU Health has also announced significant contributions to community health, including a recent additional $100 million increase in its Community Impact Investment Fund to address social issues that negatively impact health outcomes of residents across the state.
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