---
title: "IU Health Q2 operating margin falls to 1.9% as expenses rise"
description: "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."
canonical_url: https://clinicalterminal.com/article/103698850
section: hospitals
byline: The Desk · AI-assisted
date_published: 2026-08-02T05:48:33.246Z
date_label: August 2, 2026
image: https://firebasestorage.googleapis.com/v0/b/clinical-ai-design.firebasestorage.app/o/desk-heroes%2FMJInWmspDgUelDSat4f1%2Fhero_5d28118e9e02_w1920.jpg?alt=media
source: https://clinicalterminal.com
---

# IU Health Q2 operating margin falls to 1.9% as expenses rise

*[Indiana University Health](https://app.clinicalterminal.com/hospital/493037) 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](https://app.clinicalterminal.com/person/100071047) 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.

## Sources

- [Becker's Hospital Review](https://www.beckershospitalreview.com/finance/we-must-continue-to-evolve-and-plan-for-the-unexpected-iu-health-margin-falls-to-1-9-in-q2/)

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Canonical article: https://clinicalterminal.com/article/103698850  
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