IU Health reports $715M net loss in 2022

Indiana University Health is the latest system to attribute its disappointing 2022 financial performance to rising costs and investment-related losses.

Indianapolis-based IU Health reported a loss of $715.11 million in 2022 on Friday, compared with a loss of $861.51 million a year earlier. The nonprofit system’s annual losses due to poor performance in the financial markets included a $698.16 million loss.

Annual operating revenue rose 2.8% to $8.09 billion, including a 4.6% jump in patient services revenue driven by volume growth in surgery, emergency department visits and radiological procedures. Hospital admissions fell slightly. Spending rose 3.3% to $7.97 billion for 2022, driven by labor, drug and supply costs.

IU Health will seek to address economic headwinds by limiting capital expenditures, optimizing resources and implementing operational efficiencies, the hospital said in a news release.

As Indiana’s largest healthcare system, IU Health operates 16 hospitals and more than 300 physician offices, surgical centers and other care facilities.

IU Health also noted that the ongoing price-cutting plan is having a negative impact on revenue. In late 2021, IU Health announced it would take measures to bring its average commercial prices as a percentage of Medicare in line with the national average by 2025 – a move expected to cost the system more than $1 billion in revenue. hopefully. IU Health has previously come under criticism for overcharging commercial customers.

In 2020, commercial prices were 280% of Medicare prices, falling to 269% in 2021. Prices were up 265% in the first nine months of 2022, the latest data available.

A spokesperson said that IU Health reported $120 million less revenue in 2021 as a result of the cost-cutting plan. This equates to 1.5% of the system’s total operating revenue that year. The spokeswoman did not provide a number for 2022.

“IU Health acknowledges its responsibility to help drive down the cost of health care in Indiana. We acknowledge that hospital prices for commercial customers in our state are higher than the national average, and we are the only There are health systems that have not only publicly committed to reducing them but that have actually taken concrete steps to do so,” the system said in a statement last year.

The system has so far achieved a 45% average price reduction in radiology services, a 30% reduction in specialty pharmacy and approximately 24% in ambulance services. IU Health said nearly all laboratory services are at or below Medicare prices. The system plans to make a similar price adjustment in 2023.

Source link

Leave a Comment