IU Health, facing profit questions, gives medical school $416 million

INDIANAPOLIS (AP) — Indiana University Health has quietly donated $416 million to the Indiana University School of Medicine — a move that comes as the state’s largest hospital system faces pressure to cut prices and its benefits.

The donation was not announced by any of the institutions, which are separate organizations, but was noted as a “contribution to a related entity” made on Dec. 30 in IU Health’s financial statements released this month, a reported the Indianapolis Business Journal.

A reviewer from IU Health said the donation appeared to be aimed at reducing the hospital system’s profits in 2021 to less than $1 billion, to around $860 million, as it comes under scrutiny from from state legislators and others.

“It looks like it was an attempt to reduce their profitability, so it didn’t seem that high,” said Al Hubbard, a former state Republican Party chairman who leads the group Hoosiers for Affordable Healthcare.

IU Health, a nonprofit that operates 16 hospitals in the state, said it generally supports IU’s medical school with ongoing operational work. The significant contribution allows IU Health to support the medical school “in a more meaningful way,” he said.

Over the past few years, IU Health, which holds over $7 billion in cash and investments. contributed approximately $17 million annually to the School of Medicine. He has also made larger donations to the medical school, including $65 million in 2021 and $61 million in 2020.

In January, Indiana’s top legislative leaders wrote letters calling on hospitals and state health insurers to reduce the “runaway costs” of health care, saying prices in Indiana were well above the national average.

IU Health reported annual profit of $1.09 billion in 2019 and $1.1 billion in 2020. This is considered “excess of revenue over expenses” because IU Health is a nonprofit system. lucrative. IU Health announced in December that it was freezing its prices through 2025 to help bring it into line with national average costs.

Indiana University spokesperson Chuck Carney said IU Health provides annual funding to the School of Medicine, which plans to move its classrooms in coming years to the new hospital. of IU Health in downtown Indianapolis. This hospital will be built just south of the current Methodist Hospital campus.

About John Tuttle

Check Also

Opinion: Healthcare costs for businesses must be beaten

For almost every small business in Missouri that offers health care benefits to their employees, …