Indianapolis-based Indiana University Health's operating income fell to $65 million in the third quarter compared to $88.7 million the previous year, a drop of more than 25 percent due to higher expenses from increased patient care and workforce investment.
According to an Oct. 27 news release, IU Health's income for the nine-month period ending Sept. 30 was $56.5 million versus the previous year's $530 million for the nine-month period in 2021. Operating revenue grew to $2.04 billion in the last quarter and $5.95 billion over the nine months, up 5.2 percent and 3.5 percent from the previous year.
IU Health operations faced rising costs for labor during a period of high inflation. Operations expenses rose 12.4 percent to $5.89 billion in the first nine months compared to the previous year, driven by a 21 percent increase in salaries, wages, and benefits. According to the release, the investment in labor was necessary due to worker shortages and growing patient demand.
"Although hospitals face intense financial and operational challenges, IU Health remains committed to its pledge to bring its commercial prices to the national average by 2025, while continuing to make significant investments in major new hospital projects and delivering nationally recognized care. High healthcare costs are a major national concern and IU Health is committed to doing its part by delivering more than $1 billion in savings to Hoosiers from 2021 to 2025," said Jenni Alvey, senior vice president and CFO at IU Health.