Indianapolis-based Indiana University Health posted $53.1 million in operating income (1.2% margin) for the six months ending June 30, a 73% slide from the $195.7 million (4.6% margin) reported in the same period last year. However, operating income from core operations was comparable year over year.
Core operating revenue increased 7.1% ($296.4 million) versus the first half of 2023 due to strong patient volumes, according to financial documents published Aug. 1.
Core operating expenses, excluding strategic projects, grew by 7.5% ($302.7 million) year over year as costs of labor, supplies and drugs increased to meet the higher demand for surgeries and inpatient care.
Consolidated revenue increased 5.1% versus the first half of 2023 to $4.5 billion, and consolidated expense increased 8.8% year over year to $4.4 billion.
"Costs have surged at a faster pace than our revenue growth as labor and supply and drug costs continue to increase, and we focus on strategic capital investments that support our future vision," Jenni Alvey, senior vice president and CFO, said in an Aug. 1 news release. "We remain confident that our continued focus on operational efficiencies and growth will aid us in achieving IU Health's vision of making Indiana one of the healthiest states in the nation by ensuring healthcare is of the highest quality, affordable and accessible."
Despite financial and operational challenges facing the healthcare industry, IU Health said it remains committed to a multi-year strategy and affordability plan to bring commercial prices as a percentage of Medicare consistent with national averages by 2025.