IU Health's CFO on staying optimally staffed while freezing prices

Indianapolis-based Indiana University Health Senior Vice President and CFO Jennifer Alvey discussed keeping revenue and staffing up while also enacting a five-year price freeze on a recent episode of "Becker's Healthcare Podcast."

Here is an excerpt from the podcast. Click here to download the full episode.

Editor's note: This response was lightly edited for length and clarity. 

Question: I want to talk to you about managing profit and losses and freezing prices while trying to be optimally staffed. How have you been able to accomplish both?

Jennifer Alvey: I'd like to explain what our pricing care affordability strategy actually is. It's been written many different ways in the press, and what it really is, is a multiyear plan that when you account for all the payers and services, it will essentially hold our revenue that we receive from price increases flat year over year. And so in that same time period, it'll bring more than a billion in savings for healthcare consumers after you factor in inflation. And we've committed to getting our commercial prices to national parity by the end of 2025. So kind of to your point about how can we do that while trying to be optimally staffed? We're creating an internal constraint on our system to have to get more efficient because we are holding that flat. And boy, is that a lot harder to accomplish in the current workforce environment.

So it's a great question. We actually just posted our public filing for last year, and our labor went up three times its normal amount last year. And we expect similar pressures this year, and adequate staffing will be a higher expense for us. But it really can assist our price affordability plan by allowing us to reduce the high cost of traveling nurses, catching up on carrying out thousands of elective surgeries and procedures that were postponed during the pandemic. 

Another thing that will help us is reducing the cost of common services, which are a key part of our affordability plan. So it will allow IU Health to be more competitive against the growing number of for-profit companies trying to expand into areas like radiology services, infusions, specialty services that will provide us more volume.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars