Becker's Hospital Review

35 CFO / FINANCE IU Health's CFO on staying optimally staffed while freezing prices By Marissa Plescia I ndianapolis-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 an episode of the "Becker's Healthcare Podcast." Here is an excerpt from the podcast, lightly edited for length and clarity. Question: I want to talk to you about man- aging 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 writ- ten many different ways in the press, and what it re- ally 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 aer 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 inter- nal 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 real- ly can assist our price affordability plan by allow- ing 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. n Nearly 1 in 10 adults are in medical debt: 4 things to know By Marissa Plescia N ine percent of American adults, or 23 million people, owe medical debt of at least $250, including 11 million who owe more than $2,000 and 3 million who owe more than $10,000, according to a Kaiser Family Foundation analysis published March 10. The findings come from the 2020 survey of income and program par- ticipation, which asked every adult in a household whether they owed money for medical bills in 2019 and the amount. Four additional findings: 1. Eleven percent of adults ages 35-49 reported medical debt, and 12 percent of adults ages 50-64 reported medical debt, more than other age groups. These age groups typically have more health needs than younger people, but are too young to qualify for Medicare coverage. 2. Twenty-one percent of people in poor health and 15 percent of peo- ple living with a disability reported medical debt. 3. Sixteen percent of Black adults reported medical debt, compared to 9 percent of white adults, 9 percent of Hispanic adults and 4 percent of Asian American adults. 4. Thirteen percent of adults who were uninsured for more than half of the year reported medical debt, compared to 9 percent of those who were insured for all or most of the year. n Nonprofit hospitals more likely to offer unprofitable services, study finds By Marissa Plescia N onprofit hospitals offer more unprofitable services than for-prof- it hospitals, but less than governmental hospitals do, a March Health Affairs study found. While nonprofit, for-profit and government hospitals are all more likely to offer services that are profitable, for-profit hospitals are especially likely to do so, according to the study. They are also more likely to dis- continue services if they aren't turning a profit than nonprofit hospitals, which are in turn more likely to stop services that aren't making money than government hospitals. Results of the study are similar to results from before the Affordable Care Act went into effect, when fewer patients were insured, the re- searchers said. Researchers analyzed hospital characteristics and service data from 2004 to 2019 using American Hospital Association annual member surveys. n

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