University of Iowa Hospitals and Clinics Budget Narrative


In FY 2024, the strategic focus for the University of Iowa Hospitals and Clinics (UIHC) will continue to center on the offering of a broad spectrum of clinical services to all patients, serving as the primary teaching hospital for the University, and providing a base for innovative research to improve health care. 

UI Hospitals and Clinics is committed to providing patient-focused care in an environment devoted to innovative care, excellent service, and exceptional outcomes. These three commitments identified in the strategic plan are the key drivers in drafting the FY 2024 operating budgets.  Achievement of each commitment will occur by following defined goals, strategies, and tactics.

  1. Innovative Care
  • Care Delivery - UIHC will be recognized as a state and national leader in developing and implementing new and more efficient health care delivery models that emphasize quality-driven patient experience.
  • Clinical Programs – Select UIHC clinical services will be leaders in the state and national market by offering cutting edge clinical services, robust clinical research, and strong training opportunities.
  1. Excellent Service
  • Patient Satisfaction – Patients and families will be highly satisfied with their entire UIHC experience in all settings.
  • Referring Physician Satisfaction – UIHC will be recognized by referring physicians for its efficient and effective support to their patients.
  • Staff, Faculty, and Volunteer Engagement – Staff, faculty, and volunteers are valued and engaged in the pursuit of UIHC’s vision.
  1. Exceptional Outcomes
  • Safety – UIHC will provide a continuously improving, safe environment for all patients and staff at all times.
  • Clinical Outcomes – UIHC will use a continuous improvement process to achieve exceptional clinical outcomes.

The following are key strategies implemented to achieve UIHC’s goals:

  • Assure patient quality and safety remain a top priority.
  • Improve patient admission and transfer process.
  • Recruitment and retention of high-quality staff
  • Aggressive management of labor productivity and effective flexing to match resources to volumes.
  • Review staffing efficiency and flex staffing utilization to ensure appropriate resource utilization.
  • Optimize utilization of existing operating room, inpatient, and ambulatory clinic and procedure suite platforms
  • Continue renovations to expand bed capacity.
  • Ensure maximum utilization of services offered at Iowa River Landing (IRL), North Dodge, and Scott Boulevard offsite medical buildings as well as expanding our community clinic locations to provide quality healthcare access to all Iowans.  These clinics will continue to alleviate the outpatient capacity issues at the current facility on the main campus and allow for more convenient access to services in the community and State.
  • Construct the North Liberty hospital to provide Iowans access to specialty care in a convenient location, while also adding bed and operating room capacity to constrained resources at the main UIHC campus.
  • Investment of directed payment revenues in capital projects that will improve access to care for patients by expanding and modernizing facilities.
  • Continue to improve patient access through centralized clinic appointment scheduling and allowing patients/families to schedule directly through UIHC MyChart.
  • Continue the focus to improve the patient experience with emphasis on improved access to services, enhanced communication, reduced wait times and patient satisfaction.
  • Continued focus on several key product lines, including Orthopedic Surgery, Cancer, Heart & Vascular, and Neurosciences
  • Continued emphasis on population health initiatives, including continued Care Coordination focus, Physician Quality and Cost Dashboards, and Payor ACO arrangements.
  • Focus on appropriate utilization of drugs, patient supplies and ancillary tests.
  • Continued development of innovative initiatives to reduce the costs of care and expand patient’s access to care (i.e., expand telemedicine strategy)
  • On-going policy of contracting with third-party payors at fair and reasonable rates
  • Maximize the use of the EPIC information technology infrastructure to provide comprehensive patient information under one common platform.
  • Further enhance philanthropy.



There are ever-increasing financial pressures on the healthcare industry that have been heightened with the COVID-19 pandemic, staffing shortages and inflationary challenges.  Coupled with those challenges, UI Health Care faces continued pressure on reimbursement rates from all payors. Impacts that the COVID-19 pandemic had on volumes, staffing, and patient populations is expected to continue to present risks into FY24. These, and other external challenges, will have an impact in all areas of our mission, ranging from inflationary pressure on clinical margins and continued constraint and competition for research funding.  The necessity to continue to maximize revenue opportunities, grow market share, ensure ease of access to our services, ensure the safety of our faculty, staff and patients, improve throughput, further enhance service excellence and be even more cost efficient in our operations continues to be essential. 

Expense inflation (salary and non-salary) continues to outpace the level of payor rate increases. An average salary increase of 3% is projected for next year from base salary increases.  Recruitment and retention remain a key focus to fill critical vacancies in staff.  With staffing shortages, UI Health Care has had to overcome vacancy challenges by investing in higher cost premium pay for staff as well as temporary agency labor.  Agency costs have continued to rise in conjunction with nationwide healthcare staffing shortages.  While we continue to focus on standardizing product utilization and implement supply chain savings initiatives, medical and surgical supply costs are estimated to rise almost 5.2% due to supply chain shortages and inflationary increases. Pharmaceutical cost increases are anticipated in the 3% range. 


The University of Iowa Hospitals and Clinics predicts continued high demand for its services.  Inpatient acute admissions are expected to increase approximately 2% from FY23 levels while outpatient activity is anticipated to increase approximately 5%.  The case mix index, reflective of the acuity of care required by inpatients, is anticipated to remain in alignment with FY23.


Additional net revenues will be required in FY 2024 to meet a break-even operating margin budget.  Part of achieving this additional revenue will occur through projected volume increases, prospective payment rate increase, and a chargemaster rate increase of 6.0% (approved by the Board in June to be effective July 1, 2023).  Market data indicates that UIHC charges continue to be below the 50th percentile of academic medical centers. 

As always, UIHC is concerned with the effect of higher charges on its patient population.  Self-pay patients, who account for approximately 1.0% of UIHC charges, have limited exposure due to UIHC’s charity care policy for the medically indigent.  The following table summarizes how increases in rates affect various payor groups, as well as the charity care discount sliding scale:


Rate Increase Impact by Payor:


–Charges and cost affect DRG and APC rate setting

–Charges affect new technology rate setting

–Outlier thresholds and payments are based on charges and cost

–Coinsurance up to policy maximum


–Charges and cost affect DRG and APC rate setting

–Outlier thresholds and payments are based on charges and cost

•Managed Care

–Payors with outpatient percent of charge payment provisions

–Stop-loss thresholds and payments

–Carve-out arrangements (i.e. high cost drugs, prosthesis, new technology, etc.)

–Coinsurance up to policy maximum

•Commercial Non-Contracted

–Payment based on charges

–Coinsurance up to policy maximum


-Individuals not otherwise eligible for uncompensated care discount policy


UIHC Policy Guidelines for Uncompensated Care Discount Percentages:

                                          2023 Annual Income Guidelines


                         for Financial Assistance Eligibility Determination

                                        Effective January 19, 2023








Income Level

Family Size

Poverty Guidelines






$  14,580

$  29,160

$  36,450

$   43,740

$     51,030


$  19,720

$  39,440

$  49,300

$   59,160

$     69,020


$  24,860

$  49,720

$  62,150

$   74,580

$     87,010


$  30,000

$  60,000

$  75,000

$   90,000

$     105,000


$  35,140

$  70,280

$  87,850

$   105,420

$   122,990


$  40,280

$  80,560

$  100,700

$ 120,840

$   140,980


$  45,420

$  90,840

$  113,550


$   158,970


$  50,560

$  101,120



$   176,960


$    5,140

$    10,280

$  12,850

$  15,420

$     17,990


(*) For family units over eight (8), add the amount shown for each additional member.


        Source: Department of Health and Human Services – Federal Poverty Guidelines