Indiana Univ. Health Secretly Gives $416M to Med School, Lowering Profit

Indiana University Health, the largest healthcare system in Indiana with 16 hospitals statewide, quietly donated $416 million to its associated Indiana University School of Medicine late last year, appearing to lower the healthcare giant’s profits as it faces scrutiny over its $1.1. billion revenue, according to the Associated Press.  

There was no public announcement of this donation from either institution, which is unusual for a gift that was larger than all of IU Health’s charitable contributions in the last 11 years combined.  

It was only made public by being recorded in the hospital’s December 2021 financial statement. 

Some criticized the move as an attempt to reduce the nonprofit healthcare system’s 2021 net profits from over $1 billion to about $860 million as its faces scrutiny from state lawmakers and interest groups.  

This is as healthcare costs are crushing the American dream, with the average family paying nearly $20,000 annually between insurance premiums, deductibles, and out-of-pockets costs.

In our 2019 report “Top 82 U.S. Non-Profit Hospitals,” we reported that based on its 990 tax filing in 2017, the “nonprofit” Indiana University Health had $7.8 million in gross assets.

Before 2021, IU Health typically donated around $17 million annually to the IU School of Medicine, with larger gifts around $60 million in 2020 and 2021. Recently, Indiana state lawmakers have scrutinized IU Health for high profits, and wrote a letter in January 2022 calling for lower prices in a state with healthcare prices above the national average.  

IU Health defended the gift, claiming that it is a three-year grant, and that there has been a longstanding relationship between the two entities, according to Indiana Daily Student. 

Whatever the reason for the donation, public institutions should be transparent about their donations and finances. Public disclosure laws have proven critical to oversight efforts in cases like this, when institutions try to sweep major transactions under the rug.  

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