Pandemic continued to financially punish Indiana hospitals in 1st quarter

It was a bumpy ride for hospitals in central Indiana in the first three months of 2022.

Indiana University Health lost $29.8 million, and Community Health lost $28.5 million during the quarter, as both systems postponed surgeries to deal with the rising number of COVID-19 cases.

IU Health and Community Health, both based in Indianapolis, said the number of inpatient surgeries fell while emergency room visits climbed.

Meanwhile, the parent of Ascension St. Vincent posted an $884 million loss for the three months. St. Louis-based Ascension Inc. did not break out financial information for the Indiana group of more than 20 hospitals. It attributed the operating loss to higher salaries, wages, supplies and other factors.

Community and Ascension posted results on Friday. IU Health posted results Thursday afternoon.

During the quarter, hospitals spent much of the time trying to dig their way out of a pandemic surge that filled beds and packed emergency rooms. Many hospital systems postponed non-urgent elective surgeries, such as tonsillectomies, hernia repairs and hip replacements.

IU Health, the largest hospital system in Indiana, said the pandemic continued to require significant resources and heightened precautions.

Expenses in the quarter rose 16% over the year-ago period. That was led by higher salaries, wages and benefits, which jumped 25% to $1.14 billion, due to nursing premium pay initiatives, a higher use of contract and temporary labor, higher starting salaries and base pay 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, IU Health’s chief financial officer, said in written comments.

Patient service revenue at IU Health climbed about 7% to $1.79 billion for the quarter.

IU Health said it needed to rely on its balance sheet to manage through first-quarter losses, even as negative effects of rising interest rates on stocks and bonds caused its investment portfolio to sustain losses of nearly $300 million in the quarter.

Inpatient days rose 8% but inpatient surgeries fell by nearly 10%. Emergency room visits rose 14%.

At Community Health, expenses rose in the quarter, led by a 19% increase in salaries, benefits and pension costs. The network, with eight hospitals across central Indiana, said the increase was driven by a 15% hike in the average hourly rate and a 317% increase in temporary labor costs, resulting from the use of temporary agency staffing for nursing positions.

Patient revenue at Community Health suffered as a result of a suspension of elective surgeries for several weeks during the pandemic. Inpatient surgeries fell 6.5% while emergency room visits rose 11.1%.