Med­i­caid, out­pa­tient surg­eries boost IU Health

Modern Healthcare - - REGIONAL NEWS - —Bob Her­man

In­di­ana Univer­sity Health, the aca­demic hospital sys­tem that con­trols large por­tions of the Hoosier state, grew its rev­enue in 2015, thanks in large part to the state’s con­ser­va­tive Med­i­caid ex­pan­sion.

Higher vol­umes of out­pa­tient surg­eries and physi­cian of­fice vis­its also con­trib­uted to IU Health’s boom­ing rev­enue base. The num­ber of out­pa­tient surg­eries in­creased nearly 14% in 2015.

Repub­li­can Gov. Mike Pence made a deal with the fed­eral gov­ern­ment last year, agree­ing to the Af­ford­able Care Act’s pro­vi­sion to ex­pand Med­i­caid el­i­gi­bil­ity to res­i­dents who earn up to 138% of the fed­eral poverty level. Pence’s plan of­fers dif­fer­ent lev­els of med­i­cal and den­tal cov­er­age, and also re­quires some ben­e­fi­cia­ries to make monthly pay­ments into health sav­ings ac­counts.

The in­au­gu­ral year of the Med­i­caid ex­pan­sion plan led to a 19% de­crease in In­di­anapo­lis-based IU Health’s bad debt in 2015, ac­cord­ing to its fi­nan­cial state­ments. To­tal rev­enue rose 6.5% to $6.1 bil­lion, while net op­er­at­ing sur­plus fell 1.7% to $781.8 mil­lion. The sys­tem’s op­er­at­ing mar­gin de­clined from 13.9% in 2014 to 12.8% in 2015.

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