Strong 2019 performance positions IU Health to invest in patient care goals, face new healthcare challenges

INDIANAPOLIS – Indiana University Health realized strong operational and financial performance in 2019 with gains in its multiple key goals, including making healthcare more affordable and accessible to patients.

“A successful year in 2019 allowed IU Health to significantly advance its mission of improving the health of Hoosiers, while finding ways to reduce the cost of care and improve its delivery,” said Dennis Murphy, president and chief executive officer. “We invest heavily in Indiana to be there when the community needs us. As a result of our strong 2019 outcomes, IU Health is better prepared to react to the uncertainties in healthcare, including the unprecedented circumstances surrounding the COVID-19 outbreak. IU Health has always served as a resource to respond to the state’s most acute clinical problems as well as local care needs, and we will continue to serve this unique role at this time of crisis.”

Investing in care resources

A commitment to affordable and more accessible care for patients saw major progress during 2019 as IU Health continued to invest in more-efficient operations and system innovation that solidifies its ability to provide highly specialized care and have the resources available to help patients. Highlights include:

• Clinical councils looking at efficiencies and quality measures across the system grew to 30, staffed by physicians and other experts who seek to eliminate variations in care and root out unnecessary costs. The councils have identified efficiency gains in key spending categories such as supply chain, pediatrics, lab tests and IT.
• A patient cost estimator provided 50,000 customized estimates for all medical services offered across the system. Developed in-house, the estimator provides an industry-leading degree of price transparency, including out-of-pocket expenses customized to each patient’s plan.
• The number of patient reviews of IU Health clinicians and care locations, publicly posted on IU Health’s website, grew to over 150,000, as patients increasingly rely on online consumer star ratings and reviews to choose their providers.

“IU Health continues to reinvest and work hard to be a leader in more transparent healthcare pricing and personalized attention to patients’ financial health,” said Jenni Alvey, senior vice president and chief financial officer. “Our many initiatives to contain or lower the cost of care and make billing and other services more consumer-friendly are paying notable healthcare dividends to patients. The financial and operational benefits from our efforts strengthen IU Health as it adjusts to the profound changes and uncertainties facing healthcare providers.”

Care quality initiatives

Progress was made across the board on quality-of-care measures at IU Health, which cares for over 1 million patients a year and is ranked in the top quartile of hospitals nationally for patient satisfaction.

For the third year running, IU Health saw substantial reductions in in-hospital patient harm events, which have fallen 54% overall since 2017, including a significant decrease in sepsis mortality over the past year.

To respond to growing needs around mental health and opioid abuse, virtual behavioral health care was extended to all hospital EDs plus other care sites outside Indianapolis, using a centralized hub staffed by psychiatrists, therapists, peer recovery coaches and other clinicians. The need proved strong, with thousands of consultations over the year. The hub is part of IU Health’s major investment in telehealth services that conducted over a half-million virtual encounters with patients looking for more responsive ways to receive care and, importantly, does so in a way that minimizes personal exposure to infections.

In a move that ensures timely access to specialty care for patients, a community medicine group was formed within IU Health Physicians practice, an innovative model of community care that offers specialty services in obstetrics, gynecology and other areas.

In recognition of its pre-eminent bedside care and research, the IU Health Simon Cancer Center in Indianapolis was awarded federal designation as a comprehensive cancer center, the only one in Indiana.

Operational and capital investments

IU Health continues to modernize its hospital system, which has operated with older buildings compared to its hospital peers, and now is being updated with state-of-the-art care capabilities. Among the investments that will allow IU Health to better serve its diverse urban and rural patient base and be prepared to respond to patient demands and unplanned events:

• A new regional academic health center in Bloomington and a replacement hospital in Frankfort, both under construction. Planning and design work also moved ahead for a planned groundbreaking on a consolidated adult academic health center in downtown Indianapolis.
• A new maternity unit at Riley Hospital for Children at IU Health, opening in 2020, that will create a comprehensive maternity and newborn health center for Central Indiana parents, including one of the largest NICUs in the country.
• The addition of the Schwarz Cancer Center at IU Health North Hospital in Carmel and a coming expansion of IU Health West Hospital in Avon to add beds and operating room and cath lab space.
  
• Recruitment of key new leadership for the neurosurgical service line, to ensure IU Health remains a leading provider in the market for neurosurgical services, including education, research and community outreach, well into the future.
• Opening of two new urgent cares, in downtown Indianapolis and in Avon, offering a range of walk-in services with consumer-friendly features such as the ability to use a smart phone to save a spot in line.

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.

Community benefit

IU Health provides more community benefit than any other health system in Indiana. In 2018, total community investment amounted to $860 million, including $83 million in charity care, as well as education for health professionals, clinical research and outreach initiatives. In 2019, a Community Impact Fund was established with $100 million to support statewide programs that improve the health of Hoosiers through local investments. Annual grants will fund programs to combat negative social determinants of health, addressing healthy living, educational attainment, workforce development and neighborhood improvement.

Financial results

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

• Operating revenue grew by 4.4% over 2018 to $6.7 billion. Outpatient surgery and other services saw a slight increase, while admissions fell slightly.
• Operating expenses, including wages and supplies and services, rose 3.7% to $6 billion.
• Operating income increased 10.9% to $679 million. Total earnings, including investments, rose to $1.1 billion from $296 million in 2018 due to investment gains from favorable financial markets.
• IU Health maintained AA bond ratings that reflect its strong financial position.