UIHC requests approval for 6 percent rate increase from state Board of Regents

The University of Iowa Hospitals and Clinics Committee proposed a 6 percent rate increase to the regents during a meeting on Thursday afternoon. UIHC proposed the same increase in 2018.


Tate Hildyard

University of Iowa Hospitals and Clinics are seen on Tuesday, June 23, 2020.

The University of Iowa Hospitals and Clinics Committee requested the state Board of Regents to approve a hospital rate increase of 6 percent for fiscal 2022 on Thursday.

The committee for UIHC said an increase is needed to have comparable charge levels to its peer institutions, according to a document provided by the regents. UIHC wrote the second factor for the six percent increase is limits on charge increases in UIHC’s payer contracts, which are currently at a low charge rate.

The regents approved the same rate increase in 2018. UIHC wrote in the regents document that the effective yield of a 6 percent price increase is a 0.6 increase to net revenue. The increase would start effectively July 1, 2022.

“As we do typically, we are proposing a 6 percent rate increase for next year,” UIHC Chief Financial Officer Bradley Haws told the regents Thursday.

Haws said the impact of UIHC’s requested rate increase would bring in $12.8 million of increased revenue.

UIHC’s volume during the pandemic changed the hospital’s revenues to be above budget, Haws said.

Haws told the regents that UIHC received about $66 million in federal CARES and FEMA funding that’s essential to ongoing success.

He said the UI health care system, including the UI Carver College of Medicine, has received about $74 million.

“We view that as a vital way to offset, as we talked about, the CARES money and to continue our operation,” Haws said. “Our margin this year is partly dependent upon the government programs.”

UIHC Chief Executive Officer Suresh Gunasekaran told the regents that UIHC had high nursing vacancy rates because of problems with recruitment during the pandemic.

“The issue wasn’t that we had more nurses during the pandemic, we actually had the same turnover rate during the pandemic,” Gunasekaran said.

Gunasekaran said the UIHC hired over 150 nurses in a 60-day period.

“It was a great mix of both new graduates as well as experienced nurses,” Gunasekaran said.

COVID-19 cases decrease at UIHC

Dean of the Carver College of Medicine Brooks Jackson, who is also the vice president for medical affairs, told the regents that UIHC has averaged less than two symptomatic positive COVID-19 patients in the last week.

“The fact that we are together in person is in itself a sign of the significant progress we’ve made in returning to our pre-pandemic norms,” Brooks said. “Throughout the nation and the state, rates of infection continued to decline as vaccination rates rise.”

Brooks said Johnson County has the highest vaccination rate in the state, with over 93 percent of people over 65-years-old fully vaccinated.

The Iowa Department of Public Health reported a 1 percent COVID-19  positivity case rate in Johnson County in the last seven days.

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