STRATEGY

In FY 2026, the strategic focus for University of Iowa Health will continue to center on the offering of a broad spectrum of clinical services to all patients, serving as the only academic medical center in the state of Iowa, and providing a base for innovative research to improve health care. 

University of Iowa Health 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 continue to be the key drivers in UI Health Care’s operating budgets.  Achievement of each commitment will occur by following defined goals, strategies, and tactics.

1. Innovative Care

• Care Delivery – University of Iowa Health Care 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 University of Iowa clinical services will be leaders in the state and national market by offering cutting edge clinical services, robust clinical research, and strong training opportunities.

2. Excellent Service

• Patient Satisfaction – Patients and families will be highly satisfied with their entire University of Iowa Health Care experience.
• Referring Physician Satisfaction – University of Iowa Health Care 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 University of Iowa Health Care’s vision.

3. Exceptional Outcomes

• Safety – University of Iowa Health Care will provide a continuously improving, safe environment for all patients and staff at all times.
• Clinical Outcomes – University of Iowa Health Care will use a continuous improvement process to achieve exceptional clinical outcomes.

The following are key strategies implemented to achieve University of Iowa Health Care’s goals:

• Assure patient quality and safety remain a top priority
• Improve patient admission and transfer process
• Recruitment and retention of high-quality staff across the University, Downtown, and North Liberty campuses
• Aggressive management of labor productivity and effectively flexing to match resources to volumes
• Review staffing efficiency and flex staffing utilization to ensure appropriate resource utilization
• Optimize utilization of operating rooms, inpatient beds, ambulatory clinic rooms, and procedure suite platforms
• Fully integrate Mission Cancer and Blood clinic sites into UI Health Care’s standard operations
• Ensure maximum utilization of services offered at all offsite medical to optimize quality healthcare access to all Iowans. These clinics will continue to alleviate the outpatient capacity issues at the current facility on the University campus and allow for more convenient access to services in the community and State.
• Optimize capacity within new North Liberty hospital to expand access to specialty care in a convenient location, while also adding bed and operating room capacity to constrained resources at its university 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 MyChart
• Drive improvement in the patient experience with emphasis on improved access to services, enhanced communication, reduced wait times and patient satisfaction
• Continued focus on several key service lines, including Cancer, Heart & Vascular, and Orthopedics
• Focus on efficient utilization of drugs, patient supplies and ancillary tests
• 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

CHALLENGES

Annually, the healthcare industry has to overcome challenges as a result of inflationary increases exceeding payor rate changes.  In recent years, these challenges have been coupled with staffing shortages that have required a high utilization of agency staff to supplement full-time staff.  Going into FY26, UI Health Care will be working to optimize integration of our two newest hospital campuses into its operations.  The necessity to continue to maximize revenue opportunities, 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.  As a result of staffing shortages previously mentioned, UI Health Care has had to overcome vacancy challenges by providing market adjustments to ensure competitive salaries, investing in higher cost premium pay for staff, and continuing to supplement full-time staffing with 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 and drugs are estimated to rise about 4% due to standard inflationary increases, exclusive of risks linked to tariffs. 

VOLUMES

The University of Iowa Hospitals and Clinics predicts continued high demand for its services.  Inpatient admissions are expected to increase approximately 3% from FY25 levels while outpatient activity is anticipated to increase approximately 5%, exclusive of the new Mission Cancer and Blood clinics.  The case mix index, reflective of the acuity of care required by inpatients, is anticipated to remain in alignment with FY25.

RATES

Additional net revenues will be required in FY 2026 to meet UI Health Care’s operating margin budget goals.  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, 2025).  Market data indicates that University of Iowa Health Care charges continue to be below the 50^th percentile of academic medical centers. 

As always, University of Iowa Health Care is concerned with the effect of higher charges on its patient population. Self-pay patients, who account for approximately 1.0% of charges, have limited exposure due to University of Iowa Health Care’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:

• Medicare
  • 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
• Medicaid
  • 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
• Self-Pay
  • Individuals not otherwise eligible for uncompensated care discount policy

University of Iowa Health Care Policy Guidelines for Uncompensated Care Discount Percentages:

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

https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines