IU Health reports $358M net loss as labor expenses climb 25%

Indianapolis-based Indiana University Health reported a net loss of $358.54 million for the first quarter of 2022 as its labor expenses soared, according to its financial results released April 28. The system had a net income of $330.5 million for the same period last year.

IU Health, a 16-hospital system, had $1.93 billion in revenue for the three months ended March 31, a 2.9 percent increase year over year from $1.87 billion. Its largest source of revenue was patient services, which rose 6.6 percent year over year to $1.79 billion for the first quarter of 2022 from $1.68 billion last year.

The system's expenses climbed 16.4 percent, to $1.96 billion, for the first quarter of 2022, compared to $1.68 billion for the same period last year. Salaries, wages and benefits represent a large portion of IU Health's expenses, at $1.14 billion for the first quarter this year, a 25.1 percent increase from the same period last year at $914.37 million.

IU Health posted an operating loss of $29.83 million for the first quarter of 2022, compared to an operating income of $192.66 million last year.

IU health attributed the rise in labor expenses to nursing premium pay initiatives and contract and temporary labor and wage increases.

"We continue to work through the labor shortage by investing in our workforce, particularly patient-facing roles, to ensure we can meet patient demand," Jenni Alvey, senior vice president and CFO of IU Health, said in a news release from the health system. "Additional workforce investments are expected throughout 2022. These investments are made in order to provide the best possible clinical care and to improve the health and well-being of Indiana. The challenges from the pandemic again show the critical need for hospital systems to maintain a strong financial position to be able to manage unforeseen operating challenges and continue serving the patients who depend on us."

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