IU Health earnings climb 21 percent on higher revenue, occupancy rates

Indiana University Health, the state’s largest hospital system, saw operating income climb 21 percent in the first quarter on stronger revenue and higher inpatient volumes.

The Indianapolis-based system, which operates 16 hospitals around the state, posted operating income of $133.8 million for the three months ending March 31, compared to $110.7 million a year earlier, according to recent bondholder documents.

Operating revenue climbed 3.2 percent in the quarter, to $1.53 billion.

Expenses grew by 1.8 percent, driven by salaries, wages and benefits (up 6.1 percent) and supplies, drugs, and purchased services (up 8.9 percent). But those were partially offset by a decrease in employee health claims (down 51.8 percent).

Inpatient discharges at IU Health’s hospitals climbed by 8.1 percent in the quarter. Total surgery cases dipped by about 1 percent.

IU Health disclosed that it recorded a gain of $68.2 million in the sale of MDwise, a health insurer for low-income patients which it had owned 50-50 with Health and Hospital Corp. of Marion County. MDwise announced last fall it was being sold to Michigan-based McLaren Health Care.

IU Health also said it sold two outpatient hemodialysis units in downtown Indianapolis and a home dialysis program to ISD Renal Inc., a subsidiary of DaVita Inc., last year for $25.7 million.

Last fall, IU Health bought Jay County Hospital, a 25-bed critical access hospital in Portland, south of Fort Wayne, picking up all the assets and liabilities. The deal contributed $32.8 million to IU Health’s balance sheet, the health system said.

IU Health saw its occupancy rate climb to 71.7 percent in the quarter, from 68.5 percent a year ago. But the average length of stay dipped to 5.61 days, from 5.72 days a year ago.

IU Health is one of Indiana’s largest employers, with 29,423 full-time equivalent employees.