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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndiana University Health announced Thursday that annual revenue rose 6.7% in 2024 to $9.22 billion as it cared for more patients, but that its operating income fell 25%, to $257 million.
The Indianapolis-based nonprofit hospital system cited economic pressures, including inflation, for the decline in operating income. IU Health said its operating expenses increased 8% in 2024, to $8.97 billion, driven by growth in employees, supplies and drugs resulting from higher inpatient and outpatient volumes. Its operating margin fell to 2.8% last year, from 4% in 2023.
The financial results are from IU Health’s 15 hospitals as well as its surgery and urgent care centers, five physician networks and a health insurance company. IU Health said inpatient and outpatient surgeries and medical inpatient discharges returned to levels last year not seen since before the COVID-19 pandemic.
“Despite the difficult circumstances, we have kept our commitment of reducing the cost of care and achieved our care affordability promise,” Jenni Alvey, IU Health’s senior vice president and chief financial officer, said in written remarks. “While revenue growth is positive, we must continue our focus on reducing expenses and improving operational efficiencies to ensure that increased expenses do not surpass revenue growth.”
IU Health also said revenue growth in 2025 was limited by the hospital system’s pledge to lower its average commercial prices—measured as a percentage of Medicare reimbursement rates—to be consistent with national averages by 2025.
High hospital pricing is a hot topic in Indiana. Indiana House Bill 1004, which passed the House, threatens to penalize hospitals with loss of their state nonprofit status or with a new excise tax if they exceed certain cost thresholds compared with Medicare.
IU Health, in its 2024 financial report, highlighted other efforts to streamline operations including a new organization structure with “fewer layers” and reducing its regional structure to four regions from six.
The hospital system also highlighted continued efforts to provide top-quality care, noting a 49% decrease in health care-acquired infections and harm events since 2018. IU Health also said it expects to have its new electronic health record, or EHR, called Epic, fully implemented by mid-2017.
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