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

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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.

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