Regents approve 6% University of Iowa hospitals rate hike


HR King
May 29, 2001
— Continuing what has become an annual University of Iowa Health Care cost increases, the Board of Regents on Wednesday approved a 6 percent patient rate hike — which officials said could have been higher given the economy.

“When I have talked to peers on this, given the inflationary impacts, we're seeing something above 10 percent increases,” UIHC Associate Vice President and Chief Financial Officer Mark Henrichs told the board. “So 6 percent is very reasonable, given what we see in the market and what’s going on with inflation.”

Although UIHC officials report the institution’s charge levels are “relatively low compared to peer academic institutions,” the university also is limited on increases by payer contracts.


“Many commercial payers limit annual facility charge increases to no more than 6 percent,” according to the UIHC request for a rate increase. “Given UIHC’s low charge levels, it would be reasonable to increase charges more than 6 percent. However, given the cap on charge increases in many of its contracts, it is most prudent to cap the increase proposal to 6 percent.”

The higher rates will go into effect July 1.

More revenue per patient can help UIHC keep up with rising costs of drugs and medical equipment, for example, as the largest and most lucrative hospital system in the state.

Many patients won’t experience direct impact from the higher rates, as the increases typically fall to payers like Medicare and Medicaid. But some patients — like those who pay out of pocket or get specialty care services — will feel the hit.

UIHC does have a charity care program protecting the “medically indigent” from being impacted by increases. That program discounts charges using a sliding scale based on the federal poverty levels.

Through March, UIHC’s operating income was 62 percent over budget and 27 percent above last year through the same period. Given tens of millions in losses in investments and other non-operating income, however, UIHC’s net income is 26 percent below budget and 52 percent below last year through the same period.


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