Indiana University Health, the state’s largest hospital system, said operating income plunged 34% for the first six months of the year as it struggled with the COVID-19 pandemic, which has taken a huge bite out of routine surgeries and other highly profitable procedures.
The Indianapolis-based system, which operates 16 hospitals, on Monday afternoon reported operating income of $202.8 million for the first half of the year, compared with $307.9 million a year ago.
But while its operating results were in the black, IU Health lost $215 million in investments as the stock market tanked, and lost another $131 million in defined benefit plan annuitization.
Altogether, the system lost $209 million in the first half of the year, compared to a profit of $707 million a year ago. And it doesn’t know if the worst is over.
“Due to the evolving nature of the COVID-19 response, the ultimate impact of these matters to Indiana University Health and its financial condition is presently unknown,” IU Health said in the filing.
In the first half of the year, inpatient discharges fell by 12.5% and surgeries fell by 24%. Patient revenue slid 6%, to $2.8 billion, but operating expenses climbed 5.3%, to $3.1 billion.
Supplies, drugs, purchased services and other expenses climbed 4.5%, or $48.4 million, driven primarily by increases in personal protective equipment and an increase in pharmaceutical expenses.
Salaries, wages, and benefits increased 5.3%, to $1.7 billion for the first half of the year, primarily as the result of base pay increases as well as a slight increase in the number of employees.
The health system has about 31,000 employees, including 3,000 doctors. It has 2,661 licensed beds at 16 hospitals across Indiana, including Methodist Hospital downtown, the state’s largest hospital.
“The salaries, wages, and benefits increase also reflects that the Indiana University Health System continued to pay its team members who were impacted by lower volumes and deferral of elective procedures but were willing to be part of a resource pool to assist where needed as the impacts of COVID-19 ramped up,” IU Health said.
Despite the challenges, the health system continues to have plenty of cash and other assets. As of June 30, it was sitting on $348 million in cash and equivalents, more than twice the amount it had on Dec. 31, or $135 million.