Indianapolis-based Indiana University Health posted a $715 million net loss in 2022 — down from a net gain of $861.5 million the prior year — as labor costs and other expenses outpaced a slight uptick in operating revenue.
In 2022, operating revenue increased 2.8 percent year over year to $8.09 billion, while operating expenses rose 3.3 percent to $7.97 billion, driven by spikes in labor, drug and supply costs.
Operating income fell 24.9 percent from 2021 to $120.6 million. Investment losses from unfavorable financial markets drove a deficit of revenue over expenses to $715.1 million from a year-earlier, according to the health system.
IU Health said it invested heavily in its 38,000-person workforce as shortages of skilled labor persisted. Hiring was prioritized and premium pay and bonuses were offered for key positions.
The system reported higher volumes in most key service lines, including surgeries, ER visits and radiological exams. Hospital admissions fell slightly.
"Nationally, hospitals face financial challenges, exacerbated by the pandemic, which threaten to create unsustainable operating results for the industry," Jennifer Alvey, senior vice president and CFO, said in a Feb. 23 news release. "IU Health is determined to overcome these headwinds through disciplined fiscal stewardship, which includes restraining capital spending, optimizing our considerable resources, and driving efficiencies in operations."
IU Health also contributed an additional $100 million to its community impact investment fund, bringing the fund's total to $200 million. Last year, it awarded $9.5 million to 14 community partners for projects that include childhood development, homeless services, transportation access, housing, workforce development, food insecurity and behavioral health.
IU Health is a 16-hospital system that includes ASCs and urgent care centers, five physician networks and a health insurance company.