IU Health Q2 operating margin falls to 1.9% as expenses rise
Indiana University Health reported operating income of $51.2 million (1.9% margin) for the second quarter of 2026, down from $132.7 million (5.4% margin) in the same quarter last year, according to financial results published July 30. Operating revenue rose to $2.7 billion from $2.5 billion, while operating expenses climbed to $2.7 billion from $2.3 billion.
For the six months ended June 30, operating revenue increased 7.4% year over year to $5 billion, driven mainly by higher retail pharmacy revenue and increased acuity. Operating expenses rose 9.3% to $5 billion. Total surgery cases fell 13.6% and ambulatory surgery volume dropped 51% due to the sale of membership interests in less-than-wholly owned ambulatory surgery center subsidiaries. Consolidated inpatient discharges were roughly flat, down 0.4%.
Net income was $616.2 million, down from $623.7 million in the prior-year period. As of June 30, long-term debt stood at $3.3 billion, total assets at $18.4 billion, and days of cash on hand at 321. IU Health said its multi-year care affordability initiative has delivered more than $1.4 billion in savings.
CFO Jenni Alvey said in a July 30 news release that the system must continue to evolve and plan for the unexpected, citing legislative changes as a factor under review while reaffirming commitments to care affordability and accessibility.