STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Financial Statements
June 30, 2022 and 2021
(With Independent Auditors’ Report Thereon)
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Table of Contents
Page
Independent Auditor’s Report 1
Management’s Discussion and Analysis 3
Financial Statements:
Statements of Net Position 8
Statements of Revenue, Expenses, and Changes in Net Position 9
Statements of Cash Flows 10
Notes to Consolidated Financial Statements 11
Supplemental Schedule
Schedule of Proportionate Share of the Net Pension Liability 53
Schedule of Contributions 54
Schedule of Changes in UIHC’s Total OPEB Liability 55
Notes to Required Supplementary Information 56
Independent Auditors’ Report
The Board of Regents
State University of Iowa:
Opinion
We have audited the financial statements of the State University of Iowa, University of Iowa Hospitals and
Clinics (UIHC), a department of the State University of Iowa, as of and for the years ended June 30, 2022
and
2021, and the related notes to the financial statements, which collectively comprise UIHC’s basic financial
statements for the years then ended as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects,
the financial position of UIHC as of June 30, 2022 and 2021, and the changes in its financial position and its
cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS). Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of UIHC and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Emphasis of Matters
Reporting Entity
As discussed in note 1(a), the financial statements of UIHC are intended to present the financial position, the
changes in financial position, and cash flows of only that portion of the State University of Iowa that is
attributable to the transactions of UIHC. They do not purport to, and do not, present fairly the financial position
of the State University of Iowa, as of June 30, 2022 and 2021, the changes in its financial position, or its cash
flows for the years then ended in accordance with U.S. generally accepted accounting principles. Our opinion is
not modified with respect to this matter.
Adoption of New Accounting Pronouncement
As discussed in note 1(g), in 2022, UIHC adopted Governmental Accounting Standards Board Statement No.
87, Leases (GASB 87). Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not
KPMG LLP
Suite 300
1212 N. 96th Street
Omaha, NE 68114-2274
Suite 1120
1248 O Street
Lincoln, NE 68508-1493
KPMG LLP, a Delaware limited liability partnership and a member firm of
the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
2
a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when
it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in
the aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
UIHC’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control related matters that
we identified during the audit.
Required Supplementary Information
U.S. generally accepted accounting principles require that the management’s discussion and analysis, the
schedule of proportionate share of the net pension liability, the schedule of contributions , and the schedule of
changes in UIHC’s total OPEB liability be presented to supplement the basic financial statements. Such
information is the responsibility of management and, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in accordance
with GAAS, which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audits of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not provide
us with sufficient evidence to express an opinion or provide any assurance.
Omaha, Nebraska
November 11, 2022
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Management’s Discussion and Analysis
June 30, 2022 and 2021
3 (Continued)
Introduction
This section of the State University of Iowa, University of Iowa Hospitals and Clinics’ (UIHC) annual financial
report presents management’s discussion and analysis of UIHC’s financial performance during the years ended
June 30, 2022 and 2021. The purpose is to provide an objective analysis of the financial activities of UIHC
based on currently known facts, decisions, and conditions. Please read it in conjunction with UIHC’s financial
statements and the accompanying notes to the financial statements.
Financial Highlights
UIHC demonstrated financial success in fiscal year 2022 with an increase in net position of $315.1 million, or
16.2%, to $2.26 billion, compared to an increase of $202.6 million, or 11.6%, in fiscal year 2021. Operating
income increased $319.4 million, or 352.4% when compared to fiscal year 2021, primarily due to 22.1% growth
in net patient service revenue relative to fiscal year 2021. In fiscal year 2022, UIHC in partnership with Iowa
Medicaid Enterprise and the State of Iowa received approval to establish a program that provides federal funds
for the State’s Medicaid program. The new program is designed to ensure Medicaid patients have access to
high-quality specialty care in Iowa and is largely responsible for the year-over-year increase in net patient
service revenue. Nonoperating revenue, net decreased $215.2 million when compared to fiscal year 2021
largely due to investment performance.
In fiscal year 2021 operating income increased $32.8 million, or 56.6%, when compared to fiscal year 2020,
primarily due to fewer disruptions to patient volumes and net patient service revenue in response to the
COVID-19 pandemic. Nonoperating revenue, net increased $83.0 million largely due to investment
performance.
UIHC implemented the provisions of Governmental Accounting Standards Board Statement No. 87, Leases
(GASB 87) in fiscal year 2022. This standard improves accounting and financial reporting for leases by
governments. UIHC adopted GASB 87 effective July 1, 2021, with an initial application date of July 1, 2020. As
a result, fiscal year 2021 has been restated. Adoption of GASB 87 resulted in the recognition of an intangible
right-to-use lease asset (lease asset) and related lease liability of approximately $117 million as of July 1, 2020
but did not materially impact UIHC’s earnings or cash flows for the year ended.
Overview of the Financial Statements
This annual report consists of two parts—management’s discussion and analysis and the basic financial
statements.
The financial statements consist of three statements—statements of net position; statements of revenue,
expenses, and changes in net position; and statements of cash flows. These financial statements and related
notes provide information about the activities of UIHC and have been prepared on an accrual basis in
accordance with Governmental Accounting Standards Board (GASB) accounting principles.
Statements of Net Position and Statements of Revenue, Expenses, and Changes in Net Position
In fiscal year 2022, net position increased by $315.1 million, or 16.2%, to $2.26 billion. The increase in net
position is primarily the result of operating income of $410.0 million and investment losses of $93.9 million.
Operating income increased $319.4 million, or 352.4% relative to fiscal year 2021, primarily due to growth in
net patient service revenue of $466.5 million, or 22.1%. The increase in net patient service revenue is the result
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Management’s Discussion and Analysis
June 30, 2022 and 2021
4 (Continued)
of continued high occupancy, an increased case mix index, and additional funding received through
participation in a federal program in partnership with Iowa Medicaid Enterprise and the State of Iowa that is
designed to ensure Medicaid patients have access to high-quality specialty care in Iowa.
In fiscal year 2021, net position increased by $202.6 million, or 11.6%, to $1.95 billion. The increase in net
position was primarily due to investment income of $116.4 million and operating income of $90.6 million.
Table 1 provides a summary of UIHC’s assets, deferred outflows, liabilities, deferred inflows, and net position
as of June 30, 2022, 2021, and 2020.
Table 1
Condensed Statements of Net Position
(In thousands)
Assets and Deferred Outflows 2022
2021 Restated
2020 Not
Restated
Current assets $ 760,989 478,148 378,385
Noncurrent cash and investments 1,588,849 1,232,678 990,795
Capital assets, net 1,215,388 1,191,105 1,101,983
Other assets 2,229 1,798 1,747
Total assets 3,567,455 2,903,729 2,472,910
Deferred outflows 53,614 61,521 51,254
Total assets and deferred outflows $ 3,621,069 2,965,250 2,524,164
Liabilities, Deferred Inflows, and Net Position
Current liabilities $ 516,769 364,193 250,993
Long-term debt 651,265 432,989 354,701
Other long-term liabilities 100,804 191,647 133,194
Total liabilities 1,268,838 988,829 738,888
Deferred inflows 88,156 27,457 36,188
Net position:
Net investment in capital assets 713,622 732,488 732,321
Restricted 17,834 5,981 5,207
Unrestricted 1,532,619 1,210,495 1,011,560
Total net position 2,264,075 1,948,964 1,749,088
Total liabilities, deferred inflows,
and net position $ 3,621,069 2,965,250 2,524,164
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Management’s Discussion and Analysis
June 30, 2022 and 2021
5 (Continued)
Table 2 shows the changes in net position for fiscal year 2022 compared to fiscal years 2021 and 2020.
Table 2
Statements of Revenue, Expenses, and Changes in Net Position
(In thousands)
2022 2021 Restated
2020 Not
Restated
Operating revenue:
Net patient service revenue $ 2,577,624 2,111,156 1,888,420
Other revenue 53,909 47,716 51,209
Total operating revenue 2,631,533 2,158,872 1,939,629
Operating expenses:
Salaries and benefits 874,701 869,745 820,953
Medical supplies and drugs 723,159 663,162 565,162
Other supplies and general expenses 500,482 419,054 392,155
Depreciation and amortization 123,167 116,282 103,483
Total operating expenses 2,221,509 2,068,243 1,881,753
Operating income 410,024 90,629 57,876
Nonoperating revenue (expense):
Loss on disposal of capital assets (108) (1,522) (1,318)
Noncapital gifts 362 205 9
Investment income (93,896) 116,428 35,391
Government funding 29,152 35,451 31,128
Interest expense (14,668) (14,471) (12,141)
Total nonoperating revenue, net (79,158) 136,091 53,069
Excess of revenue over expenses
before transfers 330,866 226,720 110,945
Capital gifts and grants 1,215 1,147 963
Net transfers out (16,970) (25,267) (12,706)
Increase in net position 315,111 202,600 99,202
Net position, beginning of year 1,948,964 1,749,088 1,649,886
Cumulative effect of adoption of accounting standard — (2,724) —
Net position, beginning of year, as restated — 1,746,364 —
Net position, end of year $ 2,264,075 1,948,964 1,749,088
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Management’s Discussion and Analysis
June 30, 2022 and 2021
6 (Continued)
Net Patient Service Revenue
In fiscal year 2022, net patient service revenue increased by $466.5 million, or 22.1%, compared to fiscal year
2021. The increase was largely driven by an increased number of outpatient clinic visits, an increased case mix
index, and additional funding received through participation in a federal program in partnership with Iowa
Medicaid Enterprise and the State of Iowa that is designed to ensure Medicaid patients have access to high-
quality specialty care in Iowa. Outpatient clinic visits increased by 113,831, or 10.8%, relative to the previous
year and the case mix index increased 1.6% to 2.42.
In fiscal year 2021, net patient service revenue increased by $222.7 million, or 11.8%, compared to fiscal year
2020. The increase was primarily driven by volume increases from transplants, outpatient visits, outpatient
surgeries, and outpatient pharmacy services. Outpatient clinic visits increased by 74,297, or 7.7%, relative to
the previous year, total surgeries increased by 2,800, or 8.5%, and the case mix index increased 6.8% to 2.38.
The provision for bad debts (a deduction from gross patient charges) increased by $8.0 million to $43.5 million
in fiscal year 2022. The increase is primarily due to the increased in gross patient revenue. In fiscal year 2021,
bad debts decreased $0.5 million to $35.4 million. The decrease was largely the result of a return to a normal
level of write-offs after fiscal year 2020 experienced an increase in up-front self-pay contractual discounts.
Operating Expenses
In fiscal year 2022, total operating expenses increased by $153.3 million, or 7.4%, compared to fiscal year
2021. Medical supplies and drugs increased by $60.0 million, or 9.0%, while other supplies and general
expenses increased by $81.4 million, or 19.4%, relative to fiscal year 2021. The growth in operating expenses
is largely the result of increased patient volumes as well as price inflation in the cost of labor, professional
services, medical supplies, and drugs.
In fiscal year 2021, total operating expenses increased by $186.5 million, or 9.9%, compared to fiscal year
2020. The increase was primarily driven by medical supplies and drugs, which increased by $98.0 million, or
17.3%, and salaries and benefits, which increased by $48.8 million, or 5.9%, compared to fiscal year 2020. The
growth in operating expenses is primarily due to increased patient volumes and as well as price inflation in the
cost of supplies and drugs.
Nonoperating Revenue and Expenses, Net
Nonoperating revenue and expenses primarily consist of investment income, government funding, and interest
expense. In fiscal year 2022, total nonoperating revenue and expense, net decreased by $215.2 million, or
158.2%, relative to fiscal year 2021. UIHC recorded net unrealized losses on investments of $109.2 million and
overall earnings on endowment and operating pools of $15.3 million, which contributed to decreased
investment income of $210.3 million relative to fiscal year 2021. UIHC received $29.2 million of government
funding in response to the COVID-19 pandemic, a decrease of $6.3 million compared to fiscal year 2021.
In fiscal year 2021, total nonoperating revenue and expense, net increased by $83.0 million, or 156.4%,
compared to fiscal year 2020. UIHC recorded net unrealized gains on investments of $103.3 million and overall
earnings on endowment and operating pools of $13.1 million, which contributed to increased investment
income of $81.0 million compared to fiscal year 2020. UIHC received $35.5 million of government funding in
response to the COVID-19 pandemic, an increase of $4.3 million compared to fiscal year 2020.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Management’s Discussion and Analysis
June 30, 2022 and 2021
7
Statements of Cash Flows
The statements of cash flows report cash receipts, cash payments, and net changes in cash resulting from
operating, investing, and financing activities. UIHC’s overall liquidity increased during fiscal year 2022, with a
net increase in cash and cash equivalents of $8.5 million. In fiscal year 2022, net cash provided by operating
activities provided cash inflows of $303.6 million and net cash provided by noncapital financing activities was
$12.5 million. Net cash provided by capital and related financing activities was $207.0 million while net cash
used in investing activities was $514.6 million.
UIHC’s overall liquidity decreased during fiscal year 2021, with a net decrease in cash and cash equivalents of
$4.1 million. In fiscal year 2021, net cash provided by operating activities provided cash inflows of
$294.4 million and net cash provided by noncapital financing activities was $10.4 million. Net cash used in
capital and related financing activities was $131.9 million. Net cash used in investing activities was $177.0
million.
Capital Assets
As of June 30, 2022, UIHC had $1.22 billion invested in capital assets, net of accumulated depreciation and
amortization. This is a $24.3 million, or 2.0%, increase when compared to capital assets, net in fiscal year 2021
of $1.19 billion.
Capital assets, net of accumulated depreciation and amortization increased $89.1 million, or 8.1%, in fiscal year
2021 compared to capital assets, net in fiscal year 2020 of $1.10 billion. The year-over-year increase is
primarily due to adoption of GASB Statement No. 87, Leases effective July 1, 2020.
Debt
As of June 30, 2022, and 2021, UIHC had $825.0 million and $460.5 million, respectively, in bonds and lease
obligations. During fiscal years 2022 and 2021, principal payments on long-term debt and other obligations
were $21.8 million and $30.9 million, respectively, excluding reductions in refunded bonds.
In fiscal year 2022, UIHC issued $112.4 million of Series S.U.I 2021A Revenue Refunding Bond. The proceeds
of the bonds were used to refund the Series S.U.I. 2011 Revenue Bond, Series S.U.I 2011A Revenue Bond,
and new construction. UIHC issued $148.7 million of Series S.U.I 2021B Refunding Bond Anticipation Note
Bond to refund the Series S.U.I 2012 Revenue Bond. UIHC issued $181.7 million of Series S.U.I 2022A Bond
for new construction of the North Liberty Hospital. UIHC issued $100.2 million of Series S.U.I 2022B Bond for
new construction of the North Liberty Hospital.
In fiscal year 2021, UIHC issued $20.9 million of Series S.U.I 2020 Revenue Refunding Bond and $3.7 million
of Series S.U.I 2020 Telecom Refunding Bond. The proceeds of the bonds were used to refund the
Series S.U.I. 2010 Revenue Bond and 2011 Telecom Bond.
Contacting UIHC’s Financial Management
This financial report provides the citizens of Iowa, UIHC patients, bondholders, and creditors with a general
overview of UIHC’s finances and operations. If you have questions about this report, please contact Mr. Mark
Henrichs, Associate Vice President for Finance and Chief Financial Officer.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINIC
S
Statements of Net Position
June 30, 2022 and 2021
(In thousands)
Assets and Deferred Outflows 2022 2021 Restated
Current assets:
Cash and cash equivalents $ 15,469 6,978
Short-term investments 173,186 108,747
Patient accounts receivable, net of estimated uncollectible of $44,856 in 2022 and $32,649 in 2021 282,136 280,114
Inventories, at cost 62,717 61,837
Current investments for debt service – restricted 9,514 601
Due from government agencies 196,849 —
Prepaid expenses and other current assets 21,118 19,871
Total current assets 760,989 478,148
Noncurrent assets:
Capital assets, net 1,215,388 1,191,105
Noncurrent cash and investments: 1,588,849 1,232,678
Other noncurrent assets 2,229 1,798
Total noncurrent assets 2,806,466 2,425,581
Total assets 3,567,455 2,903,729
Deferred outflow of resources:
Clinic acquisition costs — 167
Pension-related deferred outflows 22,824 25,693
OPEB-related deferred outflows 29,301 33,569
Debt refunding loss 1,489 2,092
Total deferred outflows 53,614 61,521
Total assets and deferred outflows $ 3,621,069 2,965,250
Liabilities, Deferred Inflows, and Net Position
Current liabilities:
Current maturities of long-term debt and other obligations $ 173,700 27,560
Accounts payable and accrued expenses 223,202 190,311
Estimated third-party payor settlements 28,432 16,314
Due to related parties 41,170 99,958
Other current liabilities 43,334 25,757
Accrued interest 6,931 4,293
Total current liabilities 516,769 364,193
Long-term debt and other obligations, net of current maturities 651,265 432,989
Other long-term liabilities 100,804 191,647
Total liabilities 1,268,838 988,829
Deferred inflow of resources:
Pension-related deferred inflows 57,024 1,673
OPEB-related deferred inflows 30,214 24,938
Leases 380 686
Debt refunding gain 538 160
Total deferred inflows 88,156 27,457
Net position:
Net investment in capital assets 713,622 732,488
Restricted by donors for specific purposes 8,320 5,380
Restricted for debt service 9,514 601
Unrestricted 1,532,619 1,210,495
Total net position 2,264,075 1,948,964
Total liabilities, deferred inflows, and net position $ 3,621,069 2,965,250
See accompanying notes to financial statements.
8
STATE UNIVERSITY OF IOWA
,
UNIVERSITY OF IOWA HOSPITALS AND CLINIC
S
Statements of Revenue, Expenses, and Changes in Net Position
Years ended June 30, 2022 and 2021
(In thousands)
2022 2021 Restated
Operating revenue:
Net patient service revenue, net of provision for bad debts of
$43,456 in 2022 and $35,438 in 2021 $ 2,577,624 2,111,156
Other revenue 53,909 47,716
Total operating revenue 2,631,533 2,158,872
Operating expenses:
Salaries and benefits 874,701 869,745
Medical supplies and drugs 723,159 663,162
Other supplies and general expenses 500,482 419,054
Depreciation and amortization 123,167 116,282
Total operating expenses 2,221,509 2,068,243
Operating income 410,024 90,629
Nonoperating revenue (expenses):
Loss on disposal of capital assets (108) (1,522)
Noncapital gifts 362 205
Investment income (93,896) 116,428
Government funding 29,152 35,451
Interest expense (14,668) (14,471)
Total nonoperating (expenses) revenue , net (79,158) 136,091
Excess of revenue over expenses before transfers 330,866 226,720
Capital gifts and grants 1,215 1,147
Net transfers out (16,970) (25,267)
Increase in net position 315,111 202,600
Net position, beginning of year 1,948,964 1,749,088
Cumulative effect of adoption of accounting standard — (2,724)
Net position, beginning of year, as restated — 1,746,364
Net position, end of year $ 2,264,075 1,948,964
See accompanying notes to financial statements.
9
STATE UNIVERSITY OF IOWA
,
UNIVERSITY OF IOWA HOSPITALS AND CLINIC
S
Statements of Cash Flows
Years ended June 30, 2022 and 2021
(In thousands)
2022 2021 Restated
Cash flows from operating activities:
Receipts from patient services $ 2,390,872 2,071,965
Other receipts 53,909 47,715
Payments to employees (890,007) (816,002)
Payments to suppliers and contractors (1,251,205) (1,009,200)
Net cash provided by operating activities 303,569 294,478
Cash flows from noncapital financing activities:
Net transfers (16,970) (25,267)
Noncapital gifts 362 205
Government funding 29,152 35,451
Net cash provided by noncapital financing activities 12,544 10,389
Cash flows from capital and related financing activities:
Purchase of capital assets (141,971) (91,719)
Proceeds from the sale of capital assets 54 42
Capital gifts and grants received 1,215 1,147
Proceeds from the issuance of long-term debt 542,995 24,625
Premium received on the issuance of long-term debt 34,238 3,744
Principal paid on long-term debt and lease obligations (203,149) (54,225)
Interest paid on long-term debt and lease obligations (26,389) (15,514)
Other capital and related financing receipts 10 —
Net cash provided by (used in) capital and related financing activities 207,003 (131,900)
Cash flows from investing activities:
Proceeds from sale of investments 308,005 375,339
Purchase of investments (837,774) (565,417)
Interest and dividends received on investments 15,144 13,057
Net cash used in investing activities (514,625) (177,021)
Net increase (decrease) in cash and cash equivalents 8,491 (4,054)
Cash and cash equivalents at beginning of year 6,978 11,032
Cash and cash equivalents at end of year $ 15,469 6,978
Reconciliation of operating income to net cash provided by operating activities:
Operating income $ 410,024 90,629
Adjustments to reconcile operating income to net cash provided by operating activities:
Depreciation and amortization 123,167 116,282
Provision for bad debts 43,456 35,438
Changes in assets and liabilities:
Accounts receivable (45,478) (77,782)
Inventories and supplies (880) (11,484)
Other assets (3,452) (11,035)
Accounts payable and accrued expenses 32,891 28,201
Other liabilities (12,640) 57,462
Due to (from) related parties (58,788) 63,615
Estimated third-party payor settlements and due from government agencies (184,731) 3,152
Net cash provided by operating activities $ 303,569 294,478
Noncash investing activity:
During 2022 and 2021, the net appreciation (depreciation) in fair value of investments was $(109,218) and $103,275, respectively.
See accompanying notes to financial statements.
10
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
11 (Continued)
(1) Summary of Significant Accounting Policies and Related Matters
(a) Reporting Entity
For purposes of this report, the State University of Iowa, University of Iowa Hospitals and Clinics
(UIHC) includes the healthcare units of the State University of Iowa (the University), which are
generally referred to as the University Hospital, Stead Family Children’s Hospital, the Psychiatric
Hospital, and the Center for Disabilities and Development. UIHC is part of the University, which is a
component unit of the State of Iowa (the State) and operating under the supervision of the Board of
Regents of the State of Iowa (the Board). UIHC is a department of the University for financial reporting
purposes.
UIHC includes substantially all of the healthcare provider activities for patient care associated with the
University other than the physician and dentist services and research activities provided by the faculties
of the University’s Colleges of Medicine and Dentistry. Student Health Services, Specialized Child
Health Services outreach programs, and the University of Iowa Health System (UIHS), a UIHC affiliate,
are not included in these financial statements.
UIHC is a comprehensive tertiary care referral center located in Iowa City, Iowa, offering a full range of
clinical services in substantially all specialties and subspecialties of medicine and dentistry. UIHC
serves as a resource for the State’s primary and secondary healthcare providers. Patients are primarily
from Iowa.
(b) Basis of Presentation
UIHC’s financial statements have been prepared using the economic resources measurement focus
and the accrual basis of accounting. Under this method, revenue is recorded when earned and
expenses are recorded at the time liabilities are incurred without regard to receipt or disbursement of
cash.
(c) Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
(d) Cash and Investments
Cash and investments of UIHC include specific investments and other cash and investments that are
pooled with the cash and investments of the University and held in the name of the University. UIHC’s
share of pooled investments and income thereon is determined on a pro rata basis reflecting UIHC’s
amounts available for investment as compared with the amounts for the overall University.
For purposes of the statement of net position and statement of cash flows, cash and cash equivalents
are reported in accordance with Board policy Chapter 2.2, section 4.C.ix
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
12 (Continued)
(http://www.iowaregents.edu/plans-and-policies/board-policy-manual/22-business-
procedures/%23Investment%20Policy), which states in part, to appropriately reflect the Board’s overall
investment strategy and as outlined in GASB Statement No. 9, Reporting Cash Flows of Proprietary and
Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting,
paragraph 11 that all funds held by external investment managers, as defined in section 2.2.4.C.iv of the
Board’s investment policy, shall be reported on the audited financial statements of the Regent
institutions as investments. Investments purchased by the institutions through Board-authorized
brokerage firms that meet the definition of cash equivalents, investments with original purchase dates to
maturity of three months or less shall be reported on the audited financial statements of the Regent
institutions as cash equivalents.
Investments are reported at fair value in accordance with GASB Statement No. 31, Accounting and
Financial Reporting for Certain Investments and for External Investment Pools; GASB Statement No. 34,
Basic Financial Statements — and Management’s Discussion and Analysis — for State and Local
Governments; and GASB Statement No. 72, Fair Value Measurement and Application. Changes in
unrealized gain (loss) on the carrying value of the investments are reported as a component of
investment income in the statement of revenues, expenses, and changes in net position. Please see
note 2 for further discussion.
Undesignated cash equivalents totaling $15.5 million and $7.0 million at June 30, 2022 and 2021,
respectively, represent money market funds and other short-term investments not held by external
investment managers that mature in three months or less from date of purchase.
(e) Inventories and Supplies
Inventories consist primarily of medical, surgical, pharmaceutical, dietary, and other supplies.
Inventories are stated at the lower of cost or market, with cost determined on the first-in, first-out or
weighted average basis.
(f) Capital Assets, Net
UIHC’s capital assets (excluding intangible right-to-use lease assets) are reported at historical cost.
Contributed capital assets are reported at their estimated fair value at the time of their donation. All
capital assets other than land are depreciated or amortized using the straight-line method of
depreciation using the following asset lives:
Buildings and leasehold improvements 5–40 years
Infrastructure and land improvements 5–20 years
Equipment and software 3–10 years
(g) Leases
UIHC is a lessee for various noncancellable leases of building and equipment. UIHC is also a lessor of
building space to external parties. During fiscal year 2022, UIHC adopted Governmental Accounting
Standards Board Statement No. 87, Leases (GASB 87) effective July 1, 2021, with an initial application
date of July 1, 2020.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
13 (Continued)
The adoption of GASB 87 resulted in the recognition of an intangible right-to-use lease asset and
related lease liability of approximately $117 million as of July 1, 2020 but did not materially impact
UIHC’s earnings or cash flows for the year ended. The adjustment to net position, net investment in
capital assets, of $2.7 million that has been retrospectively applied to the previously reported July 1,
2020 balance.
Short-term leases – Leases with a maximum possible term of 12 months or less at commencement,
UIHC recognizes expense based on the provisions of the lease contract.
Lease arrangements other than short-term – All other leases (i.e. those that are not short-term), UIHC
recognizes a lease liability, and an intangible right-to-use lease asset (lease asset). As a lessor, UIHC
recognizes a lease receivable and deferred inflow of resources.
Measurement of lease amounts – At lease commencement, UIHC initially measures the lease liability
at the present value of payments expected to be made during the lease term. Subsequently, the lease
liability is reduced by the principal portion of lease payments made. The lease asset is initially
measured as the initial amount of the lease liability, less lease payments made at or before the lease
commencement date, plus any initial direct costs ancillary to placing the underlying asset into service,
less any lease incentives received at or before the lease commencement date. Subsequently, the lease
asset is amortized into amortization expense on a straight-line basis over the shorter of the lease term
or the useful life of the underlying asset. If UIHC is reasonably certain of exercising a purchase option
contained in a lease, the lease asset will be amortized over the useful life of the underlying asset.
Key estimates and judgments – Key estimates and judgments include how UIHC determines (1) the
discount rate it uses to calculate the present value of the expected lease payments, (2) lease term, and
(3) lease payments.
• UIHC generally uses published rates from United States Department of Treasury’s State and Local
Government Series (SLGS) as a proxy for its estimated incremental borrowing rate as the discount
rate for leases unless the rate that the lessor/vendor charges is known. The SLGS rate is
determined based on the start date and length of the lease term. UIHC’s incremental borrowing
rate for leases is based on the rate of interest it would need to pay if it issued general obligation
bonds to borrow an amount equal to the lease under similar terms at the commencement or
remeasurement date.
• The lease term includes the noncancellable period of the lease, plus any additional periods
covered by either UIHC or lessor unilateral option to (1) extend for which it is reasonably certain to
be exercised, or (2) terminate for which it is reasonably certain not to be exercised. Periods in
which both UIHC and the lessor/vendor have an option to terminate (or if both parties have to
agree to extend) are excluded from the lease term.
• Payments are evaluated by UIHC to determine if they should be included in the measurement of
the lease liabilities, including those payments that require a determination of whether they are
reasonably certain of being made, such as variable payments, payments for termination penalties,
and residual value guarantees.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
14 (Continued)
Remeasurement of lease amounts – UIHC monitors changes in circumstances that may require
remeasurement of a lease arrangement. When certain changes occur that are expected to significantly
affect the amount of the lease liability, the liability is remeasured and a corresponding adjustment is
made to the lease.
Presentation in statements of net position – Lease assets are reported with capital assets, net and
lease liabilities are reported with current maturities of long-term debt and other obligations in addition to
long-term debt and other obligations, net of current maturities in the statement of net position. Lease
receivables are reported in other noncurrent assets and lease deferred inflow is reported in the
deferred inflow section in the statement of net position.
Lease revenue – Similar accounting is performed when UIHC is the lessor however the UIHC lessor
activity is not material.
Variable lease revenue – Variable lease revenue is excluded from the measurement of the lease
receivable. Such amounts are recognized as lease revenue in the period earned.
(h) Deferred Outflows and Inflows of Resources
Deferred outflows of resources represent consumptions of net position that apply to future periods and
will not be recognized as an outflow of resources (expense) until then. Deferred inflows of resources
represent acquisitions of net position that apply to future periods and will not be recognized as an
inflow of resources (revenue) until then.
(i) Gifts and Grants
UIHC receives grants as well as gifts from individuals and private organizations. During fiscal years
2022 and 2021, this included government funding in response to the COVID-19 pandemic (note 16).
Gifts and grants may be restricted for either specific operating purposes or capital purposes.
(j) Restricted Resources
When UIHC has both restricted and unrestricted resources available to finance a particular program, it
is UIHC’s policy to use restricted resources before unrestricted resources.
(k) Net Position
Net position of UIHC is classified in four components. Net investment in capital assets consists of
capital assets, net of accumulated depreciation and reduced by the balances of any outstanding
borrowings used to finance the purchase or construction of those assets. Net position restricted by
donors for specific purposes is noncapital net position that must be used for a particular purpose, as
specified by grantors, or contributors external to UIHC. Net position restricted for debt service is
amounts deposited with trustees as required by bond indentures. Unrestricted net position is remaining
net position that does not meet the definition of net investment in capital assets or restricted.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
15 (Continued)
(l) Operating Revenue and Expenses
UIHC’s statements of revenue, expenses, and changes in net position distinguish between operating
and nonoperating revenue and expenses. Operating revenue results from exchange transactions
associated with providing healthcare services, UIHC’s principal activity. Nonexchange revenue,
including investment income, government funding, and gifts received for purposes other than capital
asset acquisition, is reported as nonoperating revenue. Operating expenses are all expenses incurred
to provide healthcare services, other than financing costs.
(m) Net Patient Service Revenue
UIHC has agreements with third-party payors that provide for payments to UIHC at amounts different
from its established rates. Payment arrangements include prospectively determined rates per
discharge, reimbursed costs, discounted charges, and per diem payments. Net patient service revenue
is reported at the estimated net realizable amounts from patients, third-party payors, and others for
services rendered, including estimated retroactive adjustments under reimbursement agreements with
third-party payors and estimated uncollectible amounts. Retroactive adjustments are accrued on an
estimated basis in the period the related services are rendered and adjusted in future periods as final
settlements are determined.
(n) Charity Care
UIHC provides care to patients who meet certain criteria under its charity care policy without charge or
at amounts less than its established rates. Because UIHC does not pursue collection of amounts once
determined to qualify as charity care, they are not reported as revenue in the accompanying
statements of revenue, expenses, and changes in net position.
(o) Compensated Absences
UIHC employees accumulate vacation and sick leave under the provisions of the Code of Iowa. Under
the State’s policy, accrued vacation benefits are paid at an employee’s regular hourly rate when used
or are paid upon retirement, death, or termination, with certain exceptions. Sick leave is paid in a
similar manner when used or to a maximum of $2,000 upon retirement, death, or termination with
certain exceptions. These benefits are accrued in the financial statements as earned by UIHC
employees.
(p) Pension – Iowa Public Employees Retirement System
For purposes of measuring the net pension liabilities, deferred outflows of resources and deferred
inflows of resources, and pension expense, information about the fiduciary net position of the Iowa
Public Employees Retirement System (IPERS) and additions to/deductions from IPERS’s fiduciary net
position have been determined on the same basis as they are reported by IPERS. For this purpose,
benefit payments (including refunds of employee contributions) are recognized when due and payable
in accordance with benefit terms. Investments are reported at fair value.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
16 (Continued)
(q) Income Taxes
UIHC, as part of the University, is exempt from federal income taxes, pursuant to Section 115 of the
Internal Revenue Code. As such, UIHC is subject to income taxes only on unrelated business income
under the provisions of Section 511 of the Internal Revenue Code.
(2) Deposits and Investments
UIHC’s cash and investments include specific investments and amounts pooled with cash and investments
of the University and held in the University’s name.
Noncurrent cash and investments limited by bond resolutions or designated by the Board were held for the
following purposes at June 30, 2022 and 2021:
2022 2021
Limited by bond resolutions:
Debt service reserve $ 13,022 29,404
Unspent Bond Proceeds 322,097 —
Designated by the Board:
Capital projects and equipment and other needs 907,181 770,520
Surplus 1,131 660
Improvement, extension, repair, operation, and
maintenance funds 336,802 426,396
Restricted by donors 8,616 5,698
$ 1,588,849 1,232,678
Cash and cash equivalents and short-term investments specifically identified or pooled with the cash and
investments of the University totaled $188.7 million and $115.7 million at June 30, 2022 and 2021,
respectively. Cash equivalents designated by the Board totaled $195.7 million and $126.4 million at
June 30, 2022 and 2021, respectively.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
17 (Continued)
UIHC’s investments are recorded at fair value. As of June 30, 2022, UIHC had the following investments
and quality credit ratings:
Effective Total
duration TSY/AGY market
Fixed income (years) AAA AA A BBB BB B N/A value
U.S. government agencies 3.87 $ — 72,039 — — — — — 72,039
U.S. government treasuries 3.31 — 191,337 — — — — — 191,337
Mutual funds and fixed income
funds at net asset value (NAV) 5.07 — 293,840 334,987 — 30,444 94,188 — 753,459
$ — 557,216 334,987 — 30,444 94,188 — 1,016,835
Other investments:
Cash and cash equivalents 384,406
Common stock 2,993
Mutual funds and equity funds
at NAV 254,010
Private market 38,501
Real estate 90,273
Total cash and
investments $ 1,787,018
As of June 30, 2021, UIHC had the following investments and quality credit ratings:
Effective Total
duration TSY/AGY market
Fixed income (years) AAA AA A BBB BB B N/A value
U.S. government agencies 2.28 $ — 13,878 — — — — — 13,878
Mutual funds and fixed income
funds at net asset value (NAV) 4.71 — 242,025 287,249 67,535 29,041 96,832 — 722,682
$ — 255,903 287,249 67,535 29,041 96,832 — 736,560
Other investments:
Cash and cash equivalents 242,136
Common stock 3,833
Mutual funds and equity funds
at NAV 267,338
Private markets 35,580
Real estate 63,557
Total cash and
investments $ 1,349,004
(a) Interest Rate Risk
Interest rate risk is the risk changes in interest rates will adversely affect the fair value of an investment.
This risk is measured using effective duration. At the time of purchase, the effective maturity of direct
investment purchases by the University in the operating portfolio cannot exceed 63 months. There is no
explicit limit on the average maturity of fixed-income securities in the endowment portfolios. Each
fixed-income portfolio is managed to an appropriate benchmark.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
18 (Continued)
(b) Credit Risk
Credit risk is the risk an issuer or other counterparty to an investment will not fulfill its obligation to the
University. Each fixed-income portfolio is managed to an appropriate benchmark.
(c) Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of investments in a single
issuer. Except for U.S. Treasury or agency debentures, no more than 5% of University’s direct
investments are invested in securities of a single issuer at the time of purchase. All direct investment
purchases by the University in the operating portfolio are U.S. Treasury and agency securities.
(d) Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. U.S. generally accepted
accounting principles provide a hierarchy that prioritizes the inputs to fair value measurements based
on the extent inputs to valuation techniques are observable in the marketplace. The hierarchy assigns
a higher priority to observable inputs that would reflect the University’s assumptions about how market
participants would value an asset or liability based on the best information available. Fair value
measurements should maximize the use of observable inputs and minimize the use of the
unobservable inputs. The three levels of the fair value hierarchy are as follows:
• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are
available at the measurement date
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly
• Level 3 – Unobservable inputs for the asset or liability that are used to measure fair value when
observable inputs are not available. These inputs are developed based upon the best
information available in such circumstances.
The categorization of fair value measurements by level of the hierarchy is based upon the lowest-level
input that is significant to the overall fair value measurement for a given asset or liability.
In the event that changes in the inputs used in the fair value measurement of an asset or liability result
in a transfer into a different level, such transfers are recognized at the end of the reporting period.
University investments that do not have a readily determinable fair value, such as ownership interest in
partners’ capital, are reported using (Net Asset Value) NAV per share. Used as a practical expedient
for the estimated fair value, NAV per share or its equivalent is provided by the fund manager and
reviewed by the University. Investment holdings using the NAV as a practical expedient consist of
University interests in funds investing in nonmarketable private markets and real estate, as well as
indirect holdings of publicly traded assets in fixed-income and international equity commingled funds.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
19 (Continued)
Due to the nature of the investments held by the funds, changes in market conditions, economic
environment, regulatory environment, currency exchange rates, interest rates, and commodity price
fluctuations may significantly impact the NAV of the funds and, consequently, the fair value of the
University’s interest in the funds and could materially affect the amounts reported in the financial
statements. The University attempts to manage these risks through diversification, ongoing due
diligence of fund managers, maintaining adequate liquidity, and continuously monitoring economic and
market conditions.
The following table reflects fair value measurements of investment assets at June 30, 2022, as
categorized by level of the fair value hierarchy according to the lowest level of inputs significant to each
measurement of NAV:
2022
Level 1 Level 2 Level 3 NAV Total
Fixed income:
U.S. government agencies $ 16,057 55,982 — — 72,039
U.S. government treasuries 191,337 — — — 191,337
Mutual funds 388,947 — — — 388,947
Fixed-income funds at NAV — — — 364,512 364,512
Equity and other:
Common stock 2,898 95 — — 2,993
Mutual funds 178,751 — — — 178,751
Real estate — — — 90,273 90,273
Private markets — — — 38,501 38,501
Equity funds at NAV — — — 75,259 75,259
$ 777,990 56,077 — 568,545 1,402,612
Money market/cash equivalents 384,406
Total cash and
investments $ 1,787,018
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
20 (Continued)
The following table summarizes UIHC’s investments at June 30, 2022 for which NAV was used as a
practical expedient to estimate fair value.
Fair value Unfunded
determined commitments
using NAV at June 30, Redemption Redemption
Asset class 2022 2022 frequency notice period
Fixed-income funds at NAV $ 364,512 Daily–monthly 5–60 days
Equity funds at NAV 75,259 Daily–monthly 2–30 days
Real estate:
Redeemable 90,273 Quarterly 60–90 days
Nonredeemable — N/A N/A
Private markets:
Redeemable — —
Nonredeemable 38,501 138,915 N/A N/A
Investments
measured
at NAV $ 568,545 138,915
The following table reflects fair value measurements of investment assets at June 30, 2021, as
categorized by level of the fair value hierarchy according to the lowest level of inputs significant to each
measurement of NAV:
2021
Level 1 Level 2 Level 3 NAV Total
Fixed income:
U.S. government agencies $ — 13,878 — — 13,878
Mutual funds 380,380 — — — 380,380
Fixed-income funds at NAV 342,302 342,302
Equity and other:
Common stock 3,713 120 — — 3,833
Mutual funds 191,583 — — — 191,583
Real estate — — — 63,557 63,557
Private markets — — — 35,580 35,580
Equity funds at NAV 75,755 75,755
$ 575,676 13,998 — 517,194 1,106,868
Money market/cash equivalents 242,136
Total cash and
investments $ 1,349,004
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
21 (Continued)
The following table summarizes UIHC’s investments at June 30, 2021 for which NAV was used as a
practical expedient to estimate fair value
Fair value Unfunded
determined commitments
using NAV at June 30, Redemption Redemption
Asset class 2021 2021 frequency notice period
Fixed-income funds at NAV $ 342,302 — Daily–monthly 5–60 days
Equity funds at NAV 75,755 — Daily–monthly 2–30 days
Real assets:
Redeemable 63,557 — Quarterly 60–90 days
Nonredeemable — — N/A N/A
Private equity:
Redeemable — —
Nonredeemable 35,580 32,392 N/A N/A
Investments
measured
at NAV $ 517,194 32,392
The following information is provided for investments that are valued using the NAV per share as a
practical expedient:
• Fixed-income funds – This category includes investments in mutual funds holding assets that
provide stability, generate income, and diversify market risk.
• Equity funds – This category includes investments in global equities, including both developed
and emerging markets.
• Real estate – This category includes funds that invest in open-end real estate. The University
subscribes to purchase interests in the funds, which may be called up to 18 months after
subscription date, based on the fund contribution queue. The University’s interest in the funds is
redeemable on a quarterly or semi-annual basis following an additional lock period, with
withdrawals dependent on each fund’s redemption queue per the terms of the limited partnership
agreement.
• Private markets – This category includes funds that invest in strategies such as private equity,
private real estate, and private resource investments. Capital is committed during the course of the
investment period, typically four years, of each fund, after which point capital commitments stop.
The University’s interest in the nonredeemable funds is considered to be illiquid in that from
liquidation of the underlying asset of the fund are at the discretion of the general partner per the
terms of the limited partnership agreement. Funds are typically liquidated over a period of five to
ten years, and include a mechanism to extend the length of the partnership with approval from the
limited partners.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
22 (Continued)
(3) Capital Assets
Capital assets at June 30, 2022 and 2021 are summarized as follows:
2022 2021
Land (nondepreciable) $ 23,356 22,431
Land improvements 3,895 4,637
Infrastructure 27,458 65,473
Buildings and leasehold improvements 1,579,506 1,652,601
Equipment and software 621,569 596,087
Construction in progress (nondepreciable) 84,049 26,576
2,339,833 2,367,805
Less accumulated depreciation 1,235,748 1,296,631
Total capital assets, net excluding lease assets 1,104,085 1,071,174
Lease assets, net (Note 12) 111,303 119,931
Total capital assets, net $ 1,215,388 1,191,105
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
23 (Continued)
Capital asset additions, retirements, and balances as of and for the years ended June 30, 2022 and 2021
were as follows:
June 30, Sales June 30,
2021 retirements 2022
Cost basis summary balances Additions and transfers balances
Land (nondepreciable) $ 22,431 925 — 23,356
Land improvements 4,637 — (742) 3,895
Infrastructure 65,473 1,378 (39,393) 27,458
Buildings and leasehold improvements 1,652,601 21,858 (94,953) 1,579,506
Equipment and software 596,087 62,000 (36,518) 621,569
Construction in progress (nondepreciable) 26,576 84,687 (27,214) 84,049
Total at historical cost 2,367,805 170,848 (198,820) 2,339,833
Less accumulated depreciation for:
Land improvements 2,349 388 (742) 1,995
Infrastructure 53,660 2,427 (39,393) 16,694
Buildings and leasehold improvements 819,250 51,531 (94,951) 775,830
Equipment and software 421,372 54,827 (34,970) 441,229
Total accumulated depreciation 1,296,631 109,173 (170,056) 1,235,748
$ 1,071,174 61,675 (28,764) 1,104,085
111,303
Total capital assets, net 1,215,388
Lease assets, net (Note 12)
Total capital assets, net
excluding lease assets
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
24 (Continued)
June 30, Sales June 30,
2020 retirements 2021
Cost basis summary balances Additions and transfers balances
Land (nondepreciable) $ 22,431 — — 22,431
Land improvements 4,637 — — 4,637
Infrastructure 62,268 3,206 (1) 65,473
Buildings and leasehold improvements 1,579,641 73,343 (383) 1,652,601
Equipment and software 585,727 41,500 (31,140) 596,087
Construction in progress (nondepreciable) 52,346 57,130 (82,900) 26,576
Total at historical cost 2,307,050 175,179 (114,424) 2,367,805
Less accumulated depreciation for:
Land improvements 1,961 388 — 2,349
Infrastructure 51,510 2,150 — 53,660
Buildings and leasehold improvements 769,803 49,829 (382) 819,250
Equipment and software 397,067 53,229 (28,924) 421,372
Total accumulated depreciation 1,220,341 105,596 (29,306) 1,296,631
$ 1,086,709 69,583 (85,118) 1,071,174
Lease assets, net 119,931
Total capital asset, net 1,191,105
Total capital assets, net
excluding lease assets
At June 30, 2022, construction in progress is related to various projects throughout UIHC. The estimated
cost to complete the current phase of equipment and projects under construction at June 30, 2022 is
$221.2 million. Other projects at June 30, 2022, with an estimated cost of $688.5 million, have been
committed to by the Board and/or UIHC; however, construction contracts had not been signed as of
June 30, 2022. These projects are anticipated to be funded through existing designated funds, cash
provided by future operations, and/or the issuance of additional long-term debt.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
25 (Continued)
(4) Long-term Debt and Other Obligations
Long-term debt and other obligations outstanding as of June 30, 2022 and 2021 was as follows:
2022 2021
Hospital Revenue Bonds:
Series S.U.I. 2011 – 3.000% to 4.000%; maturing serially
on September 1 through 2032 $ — 18,400
Series S.U.I. 2011A – 4.000% to 4.125%; maturing serially
on September 1 through 2028 — 10,880
Series S.U.I. 2012 – 4.000%; maturing serially
on September 1 through 2038 — 152,050
Series S.U.I. 2016 –5.000% to 5.000%; maturing serially
on September 1 through 2038 17,205 19,695
Series S.U.I. 2016A – 3.000%; maturing serially
on September 1 through 2038 14,765 16,695
Series S.U.I. 2018 – 3.000% to 5.000%; maturing serially
on September 1 through 2043 30,640 31,515
Series S.U.I. 2019 – 3.000% to 5.000%; maturing serially
on September 1 through 2039 39,705 41,125
Series S.U.I. 2020 – 2.000% to 5.000%; maturing serially
on September 1 through 2036 20,910 20,910
Series S.U.I. 2021A – 2.000% to 5.000%; maturing serially
on September 1 through 2036 110,080 —
Series S.U.I. 2021B – 0.200% to 0.200%; maturing serially
on September 1 through 2036 148,725 —
Series S.U.I. 2022A – 2.375% to 5.000%; maturing serially
on September 1 through 2036 181,705 —
Series S.U.I. 2022B – 3.000% to 3.000%; maturing serially
on September 1 through 2036 100,220 —
Net unamortized premium on hospital revenue bonds 35,436 16,231
Telecommunications Facilities Revenue Bonds:
Series S.U.I. 2011 – 3.000% to 4.500%; maturing serially
on July 1 through 2032 — 340
Series S.U.I. 2020 – 2.000% to 5.000%; maturing serially
on July 1 through 2037 9,062 9,062
Series S.U.I. 2021 – 2.000% to 5.000%; maturing serially
on July 1 through 2032 3,715 3,715
Total long-term bonds 712,168 340,618
Lease obligations (Note 12) 112,797 119,931
Total long-term debt 824,965 460,549
Long-term debt, current portion (173,700) (27,560)
$ 651,265 432,989
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
26 (Continued)
Activity in long-term debt and other obligations for the years ended June 30, 2022 and 2021 was as follows:
June 30, June 30, Amounts
2021 2022 due within
balance Additions Reductions balance one year
Hospital Revenue Bonds,
Series 2011
$ 18,400 — (18,400) — —
Hospital Revenue Bonds,
Series 2011A 10,880 — (10,880) — —
Hospital Revenue Bonds,
Series 2012
152,050 — (152,050) — —
Hospital Revenue Bonds,
Series 2016
19,695 — (2,490) 17,205 2,520
Hospital Revenue Bonds,
Series 2016A 16,695 — (1,930) 14,765 1,985
Hospital Revenue Bonds,
Series 2018
31,515 — (875) 30,640 925
Hospital Revenue Bonds,
Series 2019
41,125 — (1,420) 39,705 1,495
Hospital Revenue Bonds,
Series 2020
20,910 — — 20,910 200
Hospital Revenue Bonds,
Series 2021A — 112,345 (2,265) 110,080 3,545
Hospital Revenue Bonds,
Series 2021B — 148,725 — 148,725 148,725
Hospital Revenue Bonds,
Series 2022A — 181,705 — 181,705 1,000
Hospital Revenue Bonds,
Series 2022B — 100,220 — 100,220 —
Telecommunications Facilities
Revenue Bonds:
Series 2011 340 — (340) — —
Series 2020 9,062 — — 9,062 —
Series 2021 3,715 — — 3,715 234
Net unamortized bond premium 16,232 34,238 (15,034) 35,436 —
Total bonds payable 340,619 577,233 (205,684) 712,168 160,629
Lease obligations (Note 12)
112,797 13,071
Total long-term obligations $ 340,619 577,233 (205,684) 824,965 173,700
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
27 (Continued)
June 30, June 30, Amounts
2020 2021 due within
balance Additions Reductions balance one year
Hospital Revenue Bonds,
Series 2010
$ 23,300 — (23,300) — —
Hospital Revenue Bonds,
Series 2011
19,575 — (1,175) 18,400 1,225
Hospital Revenue Bonds,
Series 2011A 12,045 — (1,165) 10,880 1,200
Hospital Revenue Bonds,
Series 2012
157,900 — (5,850) 152,050 6,025
Hospital Revenue Bonds,
Series 2016
22,180 — (2,485) 19,695 2,490
Hospital Revenue Bonds,
Series 2016A 18,590 — (1,895) 16,695 1,930
Hospital Revenue Bonds,
Series 2018
32,340 — (825) 31,515 875
Hospital Revenue Bonds,
Series 2019
42,475 — (1,350) 41,125 1,420
Hospital Revenue Bonds,
Series 2020
— 20,910 — 20,910 —
Telecommunications Facilities
Revenue Bonds:
Series 2009 406 — (406) — —
Series 2011 5,500 — (5,160) 340 340
Series 2020 9,062 — — 9,062 —
Series 2021 — 3,715 — 3,715 —
Net unamortized bond premium 14,561 3,744 (2,073) 16,232 —
Total bonds payable 357,934 28,369 (45,684) 340,619 15,505
Lease obligations (Note 12)
119,931 12,055
Total long-term obligations $ 357,934 28,369 (45,684) 460,550 27,560
(a) Long-Term Bonds
Hospital revenue bonds are special obligations of the Board payable solely out of hospital income, the
general purpose of which is to expand and improve UIHC facilities. “Hospital income” is defined as the
gross income and funds received by the Hospital System at the University, including the proceeds of rates,
fees, charges, and payments for healthcare provider activities for patient care services rendered by the
University’s hospitals, clinics, laboratories, and ancillary facilities, less current expenses (as defined in the
resolution authorization the issuance of the bonds, the Bond Resolution). Hospital income does not include
State appropriations to the University. So long as the bonds or parity bonds remain outstanding, the entire
hospital income shall be deposited to the revenue fund and shall be disbursed to the following funds in the
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
28 (Continued)
following order: (1) the operation and maintenance fund, (2) the sinking fund, (3) the reserve fund, and
(4) the system fund. The reserve fund requirement is at least equal to the maximum annual amount of the
principal and interest coming due on the bonds and any parity bonds, or $12.2 million. Bonds issued
beginning in fiscal year 2022 do not have a debt service requirement. The maximum amount of hospital
income pledged representing the undiscounted principal and interest on the bonds is $967.9 million.
The Telecommunications Facilities Revenue Bonds (Telecommunications Bonds) represent UIHC’s share
of the remaining outstanding bonds that were issued by the University to pay costs of constructing and
installing communications facilities and equipment on the University’s campus. No specific revenue stream
of UIHC has been pledged to service the Telecommunications Bonds. Monthly payments are required to be
made to various sinking funds for payment of principal and interest. A portion of the monthly payments are
supported by UIHC.
In 2022, UIHC issued $112.3 million of Series S.U.I 2021A Revenue Refunding Bond. The proceeds of the
bonds were used to refund the Series S.U.I. 2011 Revenue Bond, Series S.U.I 2011A Revenue Bond, and
new construction.
In 2022, UIHC issued $148.7 million of Series S.U.I 2021B Refunding Bond Anticipation Note Bond to
refund the Series S.U.I 2012 Revenue Bond.
In 2022, UIHC issued $181.7 million of Series S.U.I 2022A Bond for new construction of the North Liberty
Hospital.
In 2022, UIHC issued $100.2 million of Series S.U.I 2022B Bond for new construction of the North Liberty
Hospital.
During 2021, UIHC issued $20.9 million of Series S.U.I 2020 Revenue Refunding Bond. The proceeds of
the bond were used by UIHC to refund the Series S.U.I. 2010 Revenue Bond.
During 2021, UIHC issued $3.7 million of Series S.U.I 2020 Telecom Refunding Bond. The proceeds of the
bond were used by UIHC to refund the Series S.U.I. 2011 Telecom Bond.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
29 (Continued)
Scheduled principal and interest payments on the bonds for the next five years and five-year increments
thereafter are as follows:
Principal Interest Total
Year(s) ending June 30:
2023 160,629 18,595 179,224
2024 13,454 17,042 30,496
2025 14,345 16,387 30,732
2026 17,620 15,635 33,255
2027 18,442 14,787 33,229
2028 through 2032 80,137 62,350 142,487
2033 through 2037 76,899 48,019 124,918
2038 through 2042 67,790 35,923 103,713
2043 through 2047 61,655 27,232 88,887
2048 through 2052 65,540 19,374 84,914
2053 through 2057 46,360 11,639 57,999
2055 through 2062 53,861 4,137 57,998
$ 676,732 291,120 967,852
The following are deferred outflows of resources and deferred inflows of resources related to debt
refundings as of June 30, 2022 and 2021:
2022 2022
Deferred Deferred
outflows of inflows of
resources resources
Deferred outflows and inflows from debt refunding:
Revenue Bonds Series 2016 refunding loss $ 617 —
Revenue Bonds Series 2016A refunding loss 872 —
Revenue Bonds Series 2020 refunding gain — 93
Revenue Bonds Series 2021A refunding gain — 62
Revenue Bonds Series 2021B refunding gain — 337
Telecom Bonds Series 2020 refunding gain — 29
Telecom Bonds Series 2021 refunding gain — 17
$ 1,489 538
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
30 (Continued)
2021 2021
Deferred Deferred
outflows of inflows of
resources resources
Deferred outflows and inflows from debt refunding:
Revenue Bonds Series 2011A refunding loss $ 145 —
Revenue Bonds Series 2016 refunding loss 817 —
Revenue Bonds Series 2016A refunding loss 1,130 —
Revenue Bonds Series 2020 refunding gain — 106
Telecom Bonds Series 2020 refunding gain — 33
Telecom Bonds Series 2021 refunding gain — 21
$ 2,092 160
(5) Retirement Benefit Plans
(a) Teachers Insurance and Annuity Association
Substantially, all UIHC employees meeting eligibility requirements participate in the University of Iowa
Retirement Plan (the Plan), which is a defined-contribution retirement plan providing benefits through
the Teachers Insurance and Annuity Association (TIAA). During fiscal years 2022 and 2021, UIHC’s
contributions amount to $42.9 million and $41.5 million, respectively. UIHC contributions to the Plan are
10.00% of employee compensation after the first five years of employment. During the first five years of
employment, UIHC’s contribution is 6.67% of the first $4,800 of compensation and 10.00% of the
remaining balance of employee compensation. Employees are required to contribute an amount equal
to 50.00% of UIHC’s contribution. All contributions to the Plan are immediately 100.00% vested.
(b) Iowa Public Employees Retirement System
Plan description – Eligible employees not electing to participate in the Plan are required to participate in
the Iowa Public Employees’ Retirement System (IPERS), which is a cost-sharing, multiple-employer
defined-benefit pension plan administered by the State. IPERS issues a stand-alone financial report,
which is available to the public by mail at 7401 Register Drive, P.O. Box 9117, Des Moines, Iowa
50306-9117 or at www.ipers.org. IPERS benefits are established under Iowa Code Chapter 97B and
the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan
documents. The following brief description is provided for general informational purposes only. Refer to
the plan documents for more information.
Pension benefits – A regular member may retire at normal retirement age and receive monthly benefits
without an early retirement reduction. Normal retirement age is age 65, any time after reaching age 62
with 20 or more years of covered employment, or when the member’s years of service plus the
member’s age at the last birthday equals or exceeds 88, whichever comes first (these qualifications
must be met on the member’s first month of entitlement to benefits). Members cannot begin receiving
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
31 (Continued)
retirement benefits before age 55. The formula used to calculate a regular member’s monthly IPERS
benefit includes:
• A multiplier (based on years of service)
• The member’s highest five-year average salary (for members with service before June 30, 2012,
the highest three-year average salary as of that date will be used if it is greater than the highest
five-year average salary).
If a member retires before normal retirement age, then the member’s monthly retirement benefit will be
permanently reduced by an early retirement reduction, which is calculated differently for service earned
before and after July 1, 2012. For service earned before July 1, 2012, the reduction is 0.25% for each
month that the member receives benefits before the member’s earliest normal retirement age. For
service earned starting July 1, 2012, the reduction is 0.50% for each month that the member receives
benefits before age 65.
Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the
same for the rest of the member’s lifetime. However, to combat the effects of inflation, retirees who
began receiving benefits prior to July 1990 receive a guaranteed dividend with their regular
November benefit payments.
Disability and death benefits – A vested member who is awarded federal Social Security disability or
Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability
benefits are not reduced for early retirement. If a member dies before retirement, the member’s
beneficiary will receive a lifetime annuity or a lump-sum payment equal to the present actuarial value of
the member’s accrued benefit or calculated with a set formula, whichever is greater. When a member
dies after retirement, death benefits depend on the benefit option the member selected at retirement.
Contributions – Effective July 1, 2012, as a result of a 2010 law change, the contribution rates are
established by IPERS following the annual actuarial valuation, which applies IPERS’s Contribution
Rate Funding Policy and Actuarial Amortization Method. Statute limits the amount rates can increase or
decrease each year to one percentage point. IPERS’s Contribution Rate Funding Policy requires that
the actuarial contribution rate be determined using the “entry age normal” actuarial cost method and
the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial
contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year
amortization period. The payment to amortize the unfunded actuarial liability is determined as a level
percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
32 (Continued)
In fiscal years 2022 and 2021, pursuant to the required rates, members and UIHC contributed the
following percentages of pay to the respective membership groups:
Fiscal year Membership group Member UIHC Total
2022 Regular 6.29 % 9.44 % 15.73 %
2022 Protection occupations 6.21 9.31 15.52
2021 Regular 6.29 9.44 15.73
2021 Protection occupations 6.41 9.61 16.02
UIHC’s contributions to IPERS for the years ended June 30, 2022 and 2021 were $10.1 million and
$8.4 million, respectively.
Net pension liabilities, pension expense, and deferred outflows of resources and deferred inflows of
resources related to pensions – At June 30, 2022 and 2021, UIHC reported a liability in other long-term
liabilities on the statements of net position of $1.1 million and $70.1 million, respectively, for its
proportionate share of the net pension liability. The net pension liability was measured as of June 30,
2021 and 2020, and the total pension liability used to calculate the net pension liability was determined
by an actuarial valuation as of those dates. UIHC’s proportion of the net pension liability was based on
UIHC’s share of contributions to the pension plan relative to the contributions of all IPERS participating
employers. At June 30, 2021, UIHC’s proportion of the collective net pension asset was negative
0.34013%. At June 30, 2020, UIHC’s proportion of the collective net pension liability was 0.99744%.
For the years ended June 30, 2022 and 2021, UIHC recognized pension expense (benefit) of ($0.7)
million and positive $16.7 million, respectively. At June 30, 2022 and 2021, UIHC reported deferred
outflows of resources and deferred inflows of resources related to pensions from the following sources:
2022 2022
Deferred Deferred
outflows of inflows of
resources resources
Difference between expected and actual experience $ 1,196 (1,171)
Changes of assumptions 1,006 (1)
Net difference between projected and actual earnings on
pension plan investments — (55,846)
Changes in proportion and differences between contributions
and proportionate share of contributions 10,569 (6)
Contributions subsequent to the measurement date 10,053 —
Total $ 22,824 (57,024)
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
33 (Continued)
2021 2021
Deferred Deferred
outflows of inflows of
resources resources
Difference between expected and actual experience $ 83 (1,660)
Changes of assumptions 3,613 (1)
Net difference between projected and actual earnings on
pension plan investments 3,968 —
Changes in proportion and differences between contributions
and proportionate share of contributions 9,598 (12)
Contributions subsequent to the measurement date 8,431 —
Total $ 25,693 (1,673)
At June 30, 2022, the $10.1 million reported as deferred outflows of resources related to pensions
resulting from UIHC’s contributions subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ending June 30, 2023. At June 30, 2022 amounts
reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense (benefit) as follows:
Year ending June 30:
2023
$ (9,967)
2024
(10,911)
2025
(10,322)
2026
(13,555)
2027
502
$ (44,253)
There are no nonemployer contributing entities at IPERS.
The total pension liability in the June 30, 2021 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement.
Rate of inflation (effective June 30, 2017) 2.60% per annum
Salary increase (effective June 30, 2017) 3.25 to 16.25% average, including inflation. Rates vary by membership group
Investment rate of return (effective June 30, 2017) 7.00% compounded annually, net of investment expense, including
inflation
Wage growth (effective June 30, 2017) 3.25% per annum, based on 2.60% inflation and 0.65% real wage
inflation
The actuarial assumptions used in the June 30, 2021 and the June 30, 2020 valuations were based on
the results of an actuarial experience study performed in March 2017 and a demographic assumption
study dated June 2018.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
34 (Continued)
Mortality rates were based on the RP-2014 Generational Mortality Tables, with age setbacks and age
set forwards as well as other adjustments based on different membership groups. Future mortality
improvements are anticipated using Projection Scale MP-2017. Different adjustments apply to pre-
retirement, postretirement, and post-disability mortality tables. See Appendix C for more detailed
descriptions.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates (expected returns,
net of pension plan investment expense and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and by adding expected inflation. The
target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Long-term
Asset expected real
Asset class allocation rate of return
Domestic equity 22.0 % 4.43 %
International equity 17.5 6.01
Global smart beta equity 6.0 5.10
Core-plus fixed income 26.0 0.29
Public credit 4.0 2.08
Cash 1.0 (0.25)
Private equity 13.0 9.51
Private real assets 7.5 4.63
Private credit 3.0 2.87
Total 100.0 %
Discount rate – The discount rate used to measure the total pension liability was 7.0% at both
measurement periods. The projection of cash flows used to determine the discount rate assumed that
employee contributions will be made at the contractually required rate and that contributions from UIHC
will be made at contractually required rates, actuarially determined. Based on those assumptions, the
pension plan’s fiduciary net position was projected to be available to make all projected future benefit
payments of current active and inactive employees. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
Sensitivity of UIHC’s proportionate share of the net pension liability to changes in the discount rate –
The following presents UIHC’s proportionate share of the net pension liability calculated using the
discount rate of 7.0% at June 30, 2022, as well as what UIHC’s proportionate share of the net pension
liability would be if it was calculated using a discount rate that is one-percentage-point lower (6.0%) or
one-percentage-point higher (8.0%) than the current rate.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
35 (Continued)
1% decrease Discount rate 1% increase
6.0% 7.0% 8.0%
UIHC’s proportionate share of the net
pension liability $ 54,124 1,145 (43,255)
The following presents UIHC’s proportionate share of the net pension liability calculated using the
discount rate of 7.0% at June 30, 2021, as well as what UIHC’s proportionate share of the net pension
liability would be if it was calculated using a discount rate that is one-percentage-point lower (6.0%) or
one-percentage-point higher (8.0%) than the current rate.
1% decrease Discount rate 1% increase
6.0% 7.0% 8.0%
UIHC’s proportionate share of the net
pension liability $ 117,111 70,067 30,623
Pension plan fiduciary net position – Detailed information about the pension plan’s fiduciary net position
is available in the separately issued IPERS financial report, which is available on IPERS’s website at
www.ipers.org.
Payables to the pension plan – At June 30, 2022 and 2021, UIHC reported payables to the
defined-benefit pension plan of $863,000 and $725,000, respectively, for legally required employer
contributions and $575,000 and $483,000, respectively, for legally required employee contributions,
which had been withheld from employee wages but not yet remitted to IPERS.
(6) Other Postemployment Benefits
(a) Plan Description
The University operates two single-employer, defined-benefit health benefit plans, which provide
medical/prescription drug benefits for employees, retirees, and their spouses. The two plans are the
Professional and Scientific and Faculty Plan (PSF) and the Merit Employee Plan (Merit Plan). Group
insurance benefits are established under Iowa Code Chapter 509A.13. No assets are accumulated in a
trust that meets the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial
Reporting of Postemployment Benefits other than Pensions.
At June 30, 2022 and 2021, UIHC recognized a total other postemployment benefits (OPEB) liability of
$49.8 million and $57.1 million, respectively, for its PSF and a liability of $13.4 million and $17.0 million
for its Merit Plan, for a total OPEB liability of $63.2 million and $74.1 million, respectively. At June 30,
2022 and 2021, $59.4 million and $69.6 million, respectively, of the total liability was recorded in other
long-term liabilities while $3.8 million and $4.5 million, respectively, was recorded in other current
liabilities.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
36 (Continued)
(b) Funding Policy
The contribution requirements of plan members are established and may be amended by the
University. Benefits are financed centrally by the University on a pay-as-you-go basis. Total
expenditures for fiscal years 2022 and 2021 were $2.1 million each year.
(c) OPEB Benefits
Individuals who are employed by the University and are eligible to participate in the group health plan
are eligible to continue healthcare benefits upon retirement. Retirees under age 65 pay the same
premium for the medical, prescription drug, and dental benefits as active employees, which results in
an implicit rate subsidy and an OPEB liability. For postemployment benefits of retirees, the University
contributes toward the cost of University health insurance and, for those who qualified for the benefit
and retired prior to July 1, 2013, the entire cost to purchase a paid-up life insurance policy, which varies
in amounts from $2,000 to $4,000, depending upon length of service.
Retired participants must be age 55 or older at retirement. At June 30, 2022 and 2021, the following
UIHC employees were covered by the benefit terms:
2022 2021
PSF:
Inactive employees or beneficiaries currently
receiving benefits 801 882
Active employees 5,184 5,091
Total 5,985 5,973
Merit Plan:
Inactive employees or beneficiaries currently
receiving benefits 124 126
Active employees 1,605 1,700
Total 1,729 1,826
(d) Total OPEB Liability
UIHC’s total OPEB liability for June 30, 2022 and 2021 was determined by an actuarial valuation with a
measurement date of June 30, 2021 and 2020, respectively.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
37 (Continued)
(e) Actuarial Assumptions
The June 30, 2022 and 2021 liabilities were determined using the following actuarial assumptions and
the entry-age normal actuarial cost method, applied to all periods included in the measurements.
2022 2021
Rate of inflation 2.50 % 2.50 %
Rates of salary increase 3.00 3.00
Discount rate
2.16 2.21
Healthcare cost trend rate pre-65 (decreasing to an ultimate
rate of 4.50%) 6.12 6.42
Healthcare cost trend rate post-65 (decreasing to an ultimate
rate of 4.50%) 6.57 7.33
Discount rate – The June 30, 2021 and 2020 discount rate used to measure the total OPEB liability
was 2.16% and 2.21%, respectively, which reflects the index rate for bond Buyer 20 Year GO Index as
of the measurement date.
Mortality rates are from the Pub-2010 Aggregate Mortality Table projected using Scale MP-2020 and
Scale MP-2018 for measurement dates of June 30, 2021 and 2020, respectively.
Annual retirement probabilities are based on varying rates by age and turnover probabilities mirror
those used for IPERS.
The actuarial assumptions used in the determination of the liabilities as of June 30, 2022 were based
on the results of an actuarial experience studies with dates from 2014 to 2018 while the determination
of liabilities as of June 30, 201 were based on the results of actuarial experience studies with dates
from 2016 to 2020.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
38 (Continued)
The following tables reflect the changes in the total PSF and Merit OPEB liability as required by
GASB Statement No. 75:
2022 total 2021 total
OPEB OPEB
Changes in total PSF OPEB liability liability liability
Total OPEB liability, beginning of year, July 1 $ 57,063 48,965
Changes for the year:
Service cost 2,301 1,806
Interest 1,248 1,737
Changes in benefit terms — —
Differences between expected and actual experiences (1,082) (27)
Changes of assumptions (5,153) 7,480
Benefit payments (3,449) (3,459)
Other (1,168) 561
Net changes (7,303) 8,098
Total OPEB liability, end of year, June 30 $ 49,760 57,063
2022 total 2021 total
OPEB OPEB
Changes in total merit OPEB liability liability liability
Total OPEB liability, beginning of year, July 1 $ 16,987 14,088
Changes for the year:
Service cost 927 735
Interest 378 510
Changes in benefit terms — —
Differences between expected and actual experiences (1,725) (39)
Changes of assumptions (1,917) 2,385
Benefit payments (915) (854)
Other (347) 162
Net changes (3,599) 2,899
Total OPEB liability, end of year, June 30 $ 13,388 16,987
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
39 (Continued)
The financial accounting valuation reflects the following assumption changes:
• A change in the discount rate to 2.16% as of June 30, 2021, from 2.21%.
• A change in the retirement rates for Staff employees to better reflect recent experience.
• A change in the mortality projection scale from MP-2018 to Scale MP-2020.
• The health care trend rate assumption was updated to a schedule of rates beginning at 6.12% in
2021, grading down to 4.50% in 2030 and beyond for pre-65 participants and 6.57% in 2021,
grading down to 4.50% in 2030 and beyond for post-65 participants.
• The marginal cost adjustment factors were changed from 62.9% to 65.2% for pre-65 participants
and from 89.5% to 90.3% for post-65 participants.
Sensitivity of UIHC’s total OPEB liability to changes in the discount rate – The following presents the
total OPEB liability of UIHC as of June 30, 2022, as well as what UIHC’s total OPEB liability would be if
it was calculated using a discount rate that is one-percentage-point lower (1.16%) or
one-percentage-point higher (3.16%) than the current discount rate.
1% decrease Discount rate 1% increase
1.16% 2.16% 3.16%
UIHC’s PSF OPEB liability $ 54,031 49,760 45,861
UIHC’s Merit OPEB liability 14,600 13,388 12,288
$ 68,631 63,148 58,149
The following presents the total OPEB liability of UIHC as of June 30, 2021, as well as what UIHC’s
total OPEB liability would be if it was calculated using a discount rate that is one-percentage-point
lower (1.21%) or one-percentage-point higher (3.21%) than the current discount rate.
1% decrease Discount rate 1% increase
1.21% 2.21% 3.21%
UIHC’s PSF OPEB liability $ 62,163 57,063 52,411
UIHC’s Merit OPEB liability 18,607 16,987 15,556
$ 80,770 74,050 67,967
Sensitivity of UIHC’s total OPEB liability to changes in the healthcare cost trend rates – The following
presents the total OPEB liability of UIHC as of June 30, 2022, as well as what UIHC’s total OPEB
liability would be if it was calculated using a healthcare cost trend rate that is one-percentage-point
lower (5.12%) or one-percentage-point higher (7.12%) than the current healthcare cost trend rate for
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
40 (Continued)
pre-65 participants, and one-percentage-point lower (5.57%) or one-percentage-point higher (7.57%)
higher than the current healthcare cost trend rate for post-65 participants.
Healthcare cost
1% decrease trend rate 1% increase
Pre-65 participants 5.12% 6.12% 7.12%
Post-65 participants 5.57% 6.57% 7.57%
UIHC’s PSF OPEB liability $ 54,669 49,760 46,327
UIHC’s Merit OPEB liability 14,903 13,388 12,280
$ 69,572 63,148 58,607
The following presents the total OPEB liability of UIHC as of June 30, 2021, as well as what UIHC’s
total OPEB liability would be if it was calculated using a healthcare cost trend rate that is
one-percentage-point lower (5.42%) or one-percentage-point higher (7.42%) than the current
healthcare cost trend rate for pre-65 participants, and one-percentage-point lower (6.33%) or
one-percentage-point higher (8.33%) higher than the current healthcare cost trend rate for post-65
participants.
Healthcare cost
1% decrease trend rate 1% increase
Pre-65 participants 5.42% 6.42% 7.42%
Post-65 participants 6.33% 7.33% 8.33%
UIHC’s PSF OPEB liability $ 52,282 57,063 63,156
UIHC’s Merit OPEB liability 15,426 16,987 19,006
$ 67,708 74,050 82,162
OPEB expense and deferred outflows and inflows of resources related to OPEB – For the years ended
June 30, 2022 and 2021, UIHC recognized OPEB expense of $2.8 million and $3.5 million,
respectively, for the PSF and $0.9 million and $1.2 million, respectively, for the Merit Plan.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
41 (Continued)
At June 30, 2022 and 2021, UIHC reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
2022 Deferred 2022 Deferred
outflows of inflows of
PSF resources resources
Difference between expected and actual experience $ 9,692 (1,257)
Changes of assumptions 11,010 (21,775)
Contributions subsequent to the measurement date 2,945 —
Total $ 23,647 (23,032)
2022 Deferred 2022 Deferred
outflows of inflows of
Merit Plan resources resources
Difference between expected and actual experience $ 850 (2,079)
Changes of assumptions 3,967 (5,103)
Contributions subsequent to the measurement date 837 —
Total $ 5,654 (7,182)
2021 Deferred 2021 Deferred
outflows of inflows of
PSF resources resources
Difference between expected and actual experience $ 11,585 (138)
Changes of assumptions 12,430 (20,617)
Contributions subsequent to the measurement date 3,521 —
Total $ 27,536 (20,755)
2021 Deferred 2021 Deferred
outflows of inflows of
Merit Plan resources resources
Difference between expected and actual experience $ 578 (206)
Changes of assumptions 4,521 (3,977)
Contributions subsequent to the measurement date 934 —
Total $ 6,033 (4,183)
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
42 (Continued)
The amount reported as deferred outflows of resources related to OPEB will be recognized as OPEB
expense as follows:
PSF
Year ending June 30:
2023 $ (713)
2024 (713)
2025 (714)
2026 (714)
2027 (714)
Total thereafter 1,238
Total $ (2,330)
Merit Plan
Year ending June 30:
2023
$ (379)
2024
(379)
2025
(374)
2026
(334)
2027
(333)
Total thereafter (566)
Total $ (2,365)
(7) Risk Management
The University, or the State on behalf of UIHC, self-insures workers’ compensation, unemployment,
medical, and dental benefits for eligible employees, automobile liability, professional liability, and general
(tort) liability. UIHC pays the employer portion of the costs related to workers’ compensation,
unemployment, medical, and dental benefits. UIHC purchases commercial property insurance for its
facilities, including business interruption insurance. UIHC also purchases commercial life and disability
insurance for eligible employees as part of the University’s benefit program.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
43 (Continued)
UIHC’s portion of the health insurance liability, which is included in accounts payable and accrued
expenses of $14.5 million and $13.2 million as of June 30, 2022 and 2021, respectively, is as follows:
2022 2021
Liability for unpaid healthcare claims at
beginning of year $ 13,233 12,733
Healthcare expenses incurred during the year 171,737 161,496
Healthcare payments to the University during
the year (170,432) (160,996)
Liability for unpaid healthcare claims at end
of year $ 14,538 13,233
The University and other Board institutions are self-insured for automobile liability up to $250,000. Losses
in excess of $250,000 are paid by the State provided in Chapter 669 of the Code of Iowa.
UIHC is an agency of the State and is covered by the State’s self-insurance for tort liability. Tort claims
against the State are handled as provided in the Iowa Tort Claims Act (Iowa Code, Chapter 669), which
also sets forth the procedures by which tort claims may be brought. Claims under Chapter 669 may be filed
against the State on account of wrongful death, personal injury, or property damage incurred by reason of
the negligence of the UIHC or its employees while acting within the scope of employment. By interagency
agreement, tort liability claims under $5,000 may be administered by the University subject to a maximum
expenditure of $100,000 per year. All other tort claims may be paid from the State’s general fund.
The State maintains an employee fidelity bond where the first $250,000 in losses is the responsibility of
UIHC. Under the state coverage, losses in excess of the $250,000 are insured up to $2 million.
(8) Transactions with Related Parties
UIHC receives certain administrative services, utilities, and other general services from the University. The
services and support costs include amounts due to the University’s Carver College of Medicine for support
of graduate medical education, specific clinical services, and other services. These services are charged to
UIHC at the approximate cost incurred by the servicing unit. For the years ended June 30, 2022 and 2021,
UIHC expensed approximately $258.1 million and $254.7 million, respectively, for these administrative
services, utilities, and other services and support requirements. At June 30, 2022 and 2021, approximately
$41.2 million and $99.9 million, respectively, were due to the University and Carver College of Medicine.
UIHC also provides certain administrative services to units of the University. These services include billing,
collection, and other physician practice-related clinic overhead expenses. These services are charged to
units of the University at the approximate cost incurred by the servicing unit. For the years ended June 30,
2022 and 2021, UIHC received revenue from these units of approximately $10.0 million and $9.5 million,
respectively, for these services, which is recorded in other revenue in the statements of revenue,
expenses, and changes in net position.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
44 (Continued)
UIHC transfers to and receives transfers from non-UIHC University of Iowa units and UIHS. Net transfers to
these units totaled negative $16.9 million and negative $25.3 million for the years ended June 30, 2022 and
2021, respectively.
UIHS was incorporated under the provisions of the Iowa Nonprofit Corporations Act on December 2, 1994.
UIHS was formed to enhance and support the educational missions of the UIHC and the College of
Medicine, particularly as these missions apply to clinical activities and statewide and multistate network
development activities. For the years ended June 30, 2022 and 2021, UIHC transferred $0 and $1.0 million,
respectively, which is recorded in net transfers in the statements of revenue, expenses, and changes in net
position.
(9) Net Patient Service Revenue
Net patient service revenue, as reflected in the accompanying statements of revenue, expenses, and
changes in net position, consists of the following:
2022 2021
Gross patient charges:
Inpatient charges $ 3,252,587 3,058,446
Outpatient charges 4,361,796 3,986,894
Total gross patient charges 7,614,383 7,045,340
Less deductions from gross patient charges:
Contractual adjustments – Medicare, Medicaid, and other 4,993,303 4,898,746
Provision for bad debts 43,456 35,438
Net patient service revenue $ 2,577,624 2,111,156
The provision for uncollectible patient accounts is based on UIHC management’s assessment of expected
net collections considering the accounts receivable aging, historical collections experience, economic
conditions, trends in healthcare coverage, and other collection indicators. Management periodically
assesses the adequacy of the allowances for uncollectible accounts and contractual adjustments based on
historical write-off experience. The results of these reviews are used to establish the net realizable value of
patient accounts receivable. UIHC follows established guidelines for placing certain patient balances with
collection agencies. Self-pay accounts are written off as bad debt at the time of transfer to the collection
agency. Remaining balances after the primary payor has adjudicated an account (if any) are categorized as
either self-pay after insurance or secondary insurance after insurance to estimate the collectability of the
remaining accounts receivable.
With partnership from the State, UIHC participates in a federal directed payment program. The primary use
of the supplemental funding will be to expand access and increase capacity for Iowa Medicaid beneficiaries
through modernization and expansion of health care facilities. In fiscal years 2022 and 2021, the program
generated $332.1 million and $0 of net patient service revenue, respectively. As of June 30, 2022 and
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
45 (Continued)
2021, UIHC recognized a $196.8 million and $0 due from government agency, reflected in current assets
on the statements of net position, related to the program.
Patient service cash receipts (net of adjustments), received in fiscal years 2022 and 2021 from the major
payor sources, are as follows:
2022 2021
Patient (self-pay) $ 22,495 18,289
Medicaid 470,281 338,170
Medicare 613,217 571,505
Commercial insurance and other third-party payors 1,284,879 1,144,001
Patient service receipts, net of adjustments 2,390,872 2,071,965
Changes to accounts receivable balance, late charges reserve,
and other third-party reserves 186,752 39,191
Patient service revenue, net of contractual
allowance, discounts, and provision for bad debts $ 2,577,624 2,111,156
UIHC has agreements with third-party payors that provide for payments to UIHC at amounts different from
its established rates. Laws and regulations governing the Medicare and Medicaid programs are extremely
complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded
estimates will change by a material amount in the near term. The fiscal year 2022 net patient service
revenue from third-party payors increased approximately $21.2 million and fiscal year 2021 net patient
service revenue decreased approximately $0.9 million due to prior year retroactive adjustments being
different than amounts previously estimated.
A summary of the payment arrangements with major third-party payors is as follows:
(a) Medicare
Inpatient acute care services and outpatient services rendered to Medicare program beneficiaries are
paid at prospectively determined rates. These rates vary according to a patient classification system
that is based on clinical, diagnostic, and other factors.
Receipts from Medicare accounted for approximately 25.9% and 27.7% of UIHC’s net patient receipts
for the years ended 2022 and 2021, respectively.
(b) Iowa Medicaid
Inpatient and outpatient services rendered to Medicaid program beneficiaries are primarily paid at
prospectively determined rates per discharge. Physician clinical services are paid based on fee
schedule amounts.
Receipts from Medicaid programs accounted for approximately 19.9% and 16.4% of UIHC’s net patient
receipts for the years ended 2022 and 2021, respectively.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
46 (Continued)
(c) Commercial
UIHC has also entered into payment agreements with certain commercial insurance carriers, health
maintenance organizations, and preferred provider organizations. The basis for payment to UIHC
under these agreements includes prospectively determined rates per discharge, discounts from
established charges, and prospectively determined daily rates.
(10) Charity Care and Uncompensated Cost of Services
UIHC provides care to patients who meet certain criteria under its charity care policy by adjusting off
charges either in full or by adjusting off an approved percentage of the self-pay balance. State Institution
accounts are automatically classified as charity care and, therefore, the patient charges are written off as
charity care in full. Patient charges written off for services and supplies furnished under UIHC’s charity
policy for the years ended June 30, 2022 and 2021 are as follows:
2022 2021
Charity care $ 16,373 16,747
Charity care for State Institution patients 51,697 47,720
Charity care charges forgone $ 68,070 64,467
The cost of charges forgone for services and supplies furnished under UIHC’s charity policy approximated
$17.4 million and $18.3 million for the years ended June 30, 2022 and 2021, respectively.
UIHC also provides reduced price services and free programs throughout the year. Medicaid
uncompensated costs of services decreased in fiscal year 2022 due to additional funding received through
participation in a federal program in partnership with Iowa Medicaid Enterprise and the State of Iowa. The
total uncompensated costs of services other than charity care, for the years ended June 30, 2022 and
2021, approximate the following:
2022 2021
Medicare $ 106,143 122,110
Medicaid 5,061 67,375
Medicaid out of state 4,411 5,816
State Institution 10,249 10,597
Uncompensated costs of services $ 125,864 205,898
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
47 (Continued)
(11) Concentrations of Credit Risk
UIHC grants credit without collateral to its patients, most of whom are Iowa residents and are insured under
third-party payor agreements. The mix of receivables from patients and third-party payors based on primary
payor at June 30, 2022 and 2021 was as follows:
2022 2021
Blue Cross Blue Shield 31 % 30 %
Commercial pay 27 29
Medicare 26 25
Medicaid 13 12
Self-pay 1 1
Other 2 3
100 % 100 %
(12) Leases (Lessee and Lessor) Arrangements
UIHC is a lessee for various noncancellable leases of buildings and equipment, and lessor for buildings.
Lease asset activity during the years ended June 30, 2022 and 2021 are summarized as follows:
June 30, Retirements June 30,
2021 and 2022
balances Additions Remeasurements balances
Lease assets:
Building $ 118,256 558 (8,179) 110,635
Leasehold Improvements 907 1,888 (489) 2,306
Equipment 11,454 2,919 (2,522) 11,851
Total lease assets 130,617 5,365 (11,190) 124,792
Less accumulated amoritzation:
Lease assets:
Buildings 7,962 10,082 (8,179) 9,865
Leasehold Improvements 202 530 (489) 243
Equipment 2,522 3,381 (2,522) 3,381
Total accumulated 10,686 13,993 (11,190) 13,489
amoritization
Total lease assets, net $ 119,931 (8,628) — 111,303
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
48 (Continued)
July 1, Retirements June 30,
2020 and 2021
balances Additions Remeasurements balances
Lease assets:
Building $ 105,926 10,625 1,705 118,256
Leasehold Improvements 875 — 32 907
Equipment 8,566 2,773 115 11,454
Total lease assets 115,367 13,398 1,852 130,617
Less accumulated amoritzation:
Lease assets:
Buildings — 7,962 — 7,962
Leasehold Improvements — 202 — 202
Equipment — 2,522 — 2,522
Total accumulated — 10,686 — 10,686
amoritization
Total lease assets, net $ 115,367 2,712 1,852 119,931
Lease liability activity during the years ended June 30, 2022 and 2021 are summarized as follows:
June 30, 2021 June 30, 2022
balances Additions Deductions balances
Lease liabilities $ 119,931 5,365 (12,499) 112,797
July 1, 2020 June 30, 2021
balance Additions Deductions balances
Lease liabilities $ 117,146 13,398 (10,613) 119,931
At July 1, 2020, the leased assets and liabilities were recognized with the adoption of GASB 87, resulting in
an adjustment to net position of $2.7 million, as a result of certain adjustments to existing lease liabilities
due to remeasurement.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
49 (Continued)
Future annual lease payments are as follows:
Principal
Amount
Interest
Amount
Total
Year(s) ending June 30:
2023
13,071 2,510 15,581
2024
12,214 2,258 14,472
2025
10,597 2,013 12,610
2026
8,494 1,807 10,301
2027
7,975 1,614 9,589
2028 - 2032 34,033 5,333 39,366
2033 - 2037 15,463 2,511 17,974
2038 - 2042 8,088 1,019 9,107
2043 - 2047 2,862 72 2,934
Total 112,797 19,137 $ 131,934
Variable lease payments – Lease payments, other than those payments that depend on an index or rate or
are fixed in substance, are excluded from the measurement of the lease liability. Such amounts are
recognized as lease expense in the period in which the obligation for those payments is incurred.
The amounts recognized as outflows (expense) for variable lease payments not included in the
measurement of the lease liabilities were $1.3 million and $1.3 million during the years ended June 30,
2022 and 2021, respectively.
Residual value guarantees of leases – As of June 30, 2022, the UIHC current has no leases with residual
value guarantees.
(13) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses reported as current liabilities at June 30, 2022 and 2021
consisted of the following amounts:
2022 2021
Payable to employees (including fringe benefits) $ 123,827 122,170
Payable to suppliers 90,824 59,917
Other
8,551 8,224
Total accounts payable and accrued expenses $ 223,202 190,311
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
50 (Continued)
(14) Other Long-term Liabilities
Other long-term liabilities at June 30, 2022 and 2021 consisted of the following amounts (in thousands):
2022 2021
Pension liability $ 1,145 70,067
OPEB liability
59,366 69,595
Payable to employees (compensated absences) 26,793 31,735
Unearned revenue 13,500 20,250
Total other long-term liabilities $ 100,804 191,647
(15) Law and Regulations
The healthcare industry is subject to numerous laws and regulations of federal, state, and local
governments. These laws and regulations include, but are not necessarily limited to, matters such as
licensure, accreditation, government healthcare program participation requirements, reimbursement for
patient services, and Medicare and Medicaid fraud and abuse. Violations of these laws and regulations
could result in expulsion from government healthcare programs together with the imposition of significant
fines and penalties, as well as significant repayments for patient services previously billed. Management
believes that UIHC is in compliance with government laws and regulations as they apply to the areas of
fraud and abuse. While no regulatory inquiries have been made that are expected to have a material effect
on UIHC’s financial statements, compliance with such laws and regulations can be subject to future
government review and interpretation, as well as regulatory action unknown or unasserted at this time.
(16) Government Funding in Response to the COVID-19 Pandemic
On March 11, 2020, the World Health Organization designated Coronavirus 2019 (COVID-19) as a global
pandemic. Patient activity and related revenues for most services were significantly impacted starting in
mid-March as various policies were implemented by federal, state, and local governments in response to
the COVID-19 pandemic that caused many people to remain at home and forced the closure of or
limitations on certain businesses, as well as suspension of elective surgical procedures. UIHC’s pandemic
response plan has multiple facets and continues to evolve as the pandemic unfolds. Precautionary steps to
enhance operational and financial flexibility, and react to the risks the COVID-19 pandemic presents to the
business, included the following:
• Implemented certain cost reduction initiatives.
• Reduced certain planned projects and capital expenditures.
• Assessed the various federal and state stimulus options available to UIHC as noted below.
In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law,
providing temporary and limited relief to hospitals and healthcare providers during the COVID-19 outbreak,
making appropriations for hospitals and healthcare providers to cover expenses and lost revenue
associated with the treatment of COVID-19 patients, expanding the Medicare Advanced and Accelerated
payment program, providing employee retention tax credits to employers affected by COVID-19, eliminating
the 2% reduction in Medicare payments from sequestration through 2020, creating an add-on payment for
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
51 (Continued)
inpatient hospitals treating COVID-19 patients, and delaying a reduction in Medicaid funding for Medicare
disproportionate share hospitals.
For the year ended June 30, 2021, UIHC received additional funds as follows: $9.8 million in Provider
Relief Fund General Distributions, $13.8 million in Provider Relief Fund Targeted Distributions, $7.1 million
in Coronavirus Relief Fund, and $4.8 million in FEMA Public Assistance Disaster Program funds.
For the year ended June 30, 2022, UIHC received additional funds as follows: $10.1 million in Provider
Relief Fund General Distributions, $14.8 million in Provider Relief Fund Targeted Distributions, $3.0 million
in Coronavirus Relief Fund, and $1.3 million in FEMA Public Assistance Disaster Program funds.
These funds are not subject to repayment, provided UIHC is able to attest to and comply with the terms
and conditions of the funding, including demonstrating that the distributions received have been used for
healthcare-related expenses or lost revenue attributable to COVID-19. Such payments are accounted for
as government grants and are recognized on a systematic and rational basis as income once there is
reasonable assurance that the applicable terms and conditions required to retain the funds will be met and
the funds are received. Based on analysis of the compliance and reporting requirements of the CARES Act
and the impact of the pandemic on operating results through the end of 2021 and 2022, UIHC has recorded
$35.5 million and $29.2 million, respectively, of coronavirus relief funds as nonoperating revenue in the
statements of revenue, expenses, and changes in net position.
The COVID-19 pandemic has affected commerce and financial markets globally. Although COVID-19
initially produced market conditions that adversely affected the fair value of UIHC’s investments, the fair
value substantially recovered by June 30, 2021.
The extent of the COVID-19 pandemic’s adverse impact on the operating results and financial condition of
UIHC has been and will continue to be driven by many factors, most of which are beyond UIHC’s control
and ability to forecast. Such factors include, but are not limited to, the scope and duration of stay-at-home
practices and business closures and restrictions, government-imposed or recommended suspensions of
elective procedures, continued declines on patient volumes for an indeterminable length of time, increases
in the number of uninsured and underinsured patients as a result of higher sustained rates of
unemployment, incremental expenses required for supplies and personal protective equipment, changes in
professional and general liability exposure, and volatility of global financial markets. Because of these and
other uncertainties, UIHC cannot estimate the length or severity of the impact of the COVID-19 pandemic
on the business and the results of operations.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Financial Statements
June 30, 2022 and 2021
(Dollars in tables in thousands)
52
(17) Subsequent Events
UIHC has reviewed subsequent events through November 11, 2022 and concluded that there were no
events or transactions during this period that would require recognition or disclosure in the financial
statements, except as follows:
In August 2022, UIHC issued $130.7 million of Series S.U.I 2022C Revenue Refunding Bond. The
proceeds of the bond were used by UIHC to refund the Series S.U.I. 2021B Bond Anticipation Note
Revenue Bond.
In October 2022, the Board of Regents, State of Iowa reached agreement with plaintiffs to settle the claims
brought in the Myers, et al. v. Iowa Board of Regents. The settlement is subject to court approval. As a
result of the tentative settlement with plaintiffs UIHC recognized $15 million within other current liabilities on
the statement of net position as of June 30, 2022.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Schedule of Proportionate Share of the Net Pension Liability
Iowa Public Employees’ Retirement System
Last Ten Fiscal Years
(In thousands)
Required Supplementary Information
June 30, 2022
(Unaudited)
UIHC’s
proportionate
share of the Plan fiduciar
y
net pension net position
UIHC’s UIHC’s liability as a as a
proportion of proportionate UIHC’s percentage of percentage
the net share of the covered- its covered- of the
pension net pension employee employee total pension
For the year ended
liability (asset) liabilit
y
payroll payroll liabilit
y
June 30, 2022 (0.34013)% $ 1,145 89,374 1.3 % 100.8 %
June 30, 2021 0.99744 70,067 77,106 90.9 82.9
June 30, 2020 0.88403 51,191 62,910 81.4 85.5
June 30, 2019 0.77810 49,240 59,251 83.1 83.6
June 30, 2018 0.70459 46,934 52,104 90.1 82.2
June 30, 2017 0.59455 37,417 40,665 92.0 81.8
June 30, 2016 0.47349 23,539 29,902 78.7 85.2
June 30, 2015 0.38388 15,536 25,706 60.4 87.6
The amounts presented for each fiscal year were determined as of June 30.
* Note: GASB Statement No. 68 requires 10 years of information to be presented in this table. However, until a full 10-year trend is compiled,
UIHC will present information for those years for which information is available.
See accompanying independent auditors’ report.
(Continued)53
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINIC
S
Schedule of Contributions
Iowa Public Employees’ Retirement System
Last Ten Fiscal Years
(In thousands)
Required Supplementary Information
June 30, 2022
(Unaudited)
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Statutorily required contribution $ 10,053 8,431 7,260 5,921 5,224 4,623 3,603 2,660 2,299 1,896
Contributions in relation to the
statutorily required contribution (10,053) (8,431) (7,260) (5,921) (5,224) (4,623) (3,603) (2,660) (2,299) (1,896)
Contribution deficiency $ — — — — — — — — — —
UIHC’s covered-employee payroll $ 106,669 89,374 77,106 62,910 59,251 52,104 40,665 29,902 25,706 21,965
Contributions as a percentage of
the covered-employee payroll 9.4 % 9.4 % 9.4 % 9.4 % 8.8 % 8.9 % 8.9 % 8.9 % 8.9 % 8.6 %
See accompanying independent auditors’ report.
54
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Schedule of Changes in UIHC’s Total OPEB Liability
Last ten fiscal years ended June 30, 2022
(Unaudited)
2022 2021 2020 2019 2018
PSF Plan:
Service cost $ 2,301 1,806 971 970 10,283
Interest 1,248 1,737 1,582 1,535 5,609
Changes in benefit terms — — — — (148,291)
Differences between expected and actual experience (1,082) (27) 1,278 — 15,488
Changes of assumptions (5,153) 7,480 6,895 (308) (30,071)
Benefit payments (3,449) (3,459) (3,323) (3,369) (2,217)
Other (1,168) 561 (848) 5,170 —
Net change in total OPEB liability (7,303) 8,098 6,555 3,998 (149,199)
Total OPEB liability, beginning of year 57,063 48,965 42,410 38,412 187,611
Total OPEB liability, end of year $ 49,760 57,063 48,965 42,410 38,412
Merit Plan:
Service cost $ 927 735 408 559 755
Interest 378 510 421 278 293
Changes in benefit terms — — — 7,848 —
Differences between expected and actual experience (1,725) (39) 305 — —
Changes of assumptions (1,917) 2,385 2,707 (4,786) (512)
Benefit payments (915) (854) (429) (421) —
Contributions from the employer — — — — (531)
Other (347) 162 (217) (2,404) —
Net change in total OPEB liability (3,599) 2,899 3,195 1,074 5
Total OPEB liability, beginning of year 16,987 14,088 10,893 9,819 9,814
Total OPEB liability, end of year $ 13,388 16,987 14,088 10,893 9,819
* Note: GASB Statement No. 75 requires 10 years of information to be presented in this table. However, until a full 10-year trend is compiled,
UIHC will present information for those years for which information is available.
See accompanying independent auditors’ report.
55
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Required Supplementary Information
June 30, 2022
(Unaudited)
56 (Continued)
(1) Pension Liability
(a) Changes of Benefit Terms
Legislation passed in 2010 modified benefit terms for current regular members. The definition of final
average salary changed from the highest three to the highest five years of covered wages. The vesting
requirement changed from four years of service to seven years. The early retirement reduction
increased from 3% per year measured from the member’s first unreduced retirement age to a 6%
reduction for each year of retirement before age 65.
(b) Changes of Assumptions
The total pension liability was determined by an actuarial valuation as of June 30, 2020, using the
following actuarial assumptions and the entry age normal actuarial cost method, applied to all periods
included in the measurement:
• Assumed investment return: 7%
• Projected salary increases: 3.25%-16.25% depending upon years of service
• Mortality tables: RP-2014 Employee and Healthy Annuitant Tables with MP-2017 generational
adjustments
• Inflation rate: 2.6%
• Payroll increase assumption: 3.25%
The 2018 valuation, which is used to determine the contribution rates effective July 1, 2019,
incorporated the following refinements after a demographic assumption study:
• Changed mortality assumptions to the RP-2014 mortality tables with mortality improvements
modeled using Scale MP-2017.
• Adjusted retirement rates.
• Lowered disability rates.
• Adjusted the probability of a vested Regular member electing to receive a deferred benefit.
• Adjusted the merit component of the salary increase assumption.
The 2017 valuation implemented the following refinements as a result of a March 2017 experience
study:
• Decreased the inflation assumption from 3.00% to 2.60% per year.
• Decreased the assumed rate of interest on member accounts from 3.75% to 3.50% per year.
• Decreased the long-term rate of return assumption from 7.50% to 7.00% per year.
• Decreased the wage growth and payroll growth assumptions from 4.00% to 3.25% per year.
• Decreased the salary increase assumption by 0.75%.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Required Supplementary Information
June 30, 2022
(Unaudited)
57 (Continued)
The 2014 valuation implemented the following refinements as a result of a quadrennial experience
study:
• Decreased the inflation assumption from 3.25% to 3.00%.
• Decreased the assumed rate of interest on member accounts from 4.00% to 3.75% per year.
• Adjusted male mortality rates for retirees in the Regular membership group.
• Moved from an open 30-year amortization period to a closed 30-year amortization period for the
unfunded actuarial liability (UAL) beginning June 30, 2014. Each year thereafter, changes in the
UAL from plan experience will be amortized on a separate closed 20-year period.
(2) OPEB Liability
(a) Changes in the University’s Total OPEB Liability and Related Ratios
• The 2021 valuation implemented the following refinements:
– The financial accounting valuation reflects the following method changes:
■ There were no method changes in the financial accounting valuation.
• The financial accounting valuation reflects the following assumption changes:
– A change in the Discount rate to 2.16% as of June 30, 2021
– A change in the retirement rates for Staff employees to better reflect recent experience
– A change in the mortality projection scale from Scale MP-2018 to Scale MP-2020
– The health care trend rate assumption was updated to a schedule of rates beginning at 6.12%
in 2021, grading down to 4.5% in 2030 and beyond for pre-65 participants and 6.57% in 2021,
grading down to 4.5% in 2030 and beyond for post-65 participants
– The marginal cost adjustment factors were changed from 62.9% to 65.2% for pre-65
participants and from 89.5% to 90.3% for post-65 participants
A removal of the excise tax on high-cost plans from the future trend
• The 2020 valuation implemented the following refinements:
– The financial accounting valuation reflects the following method changes:
■ There were no method changes in the financial accounting valuation.
• The financial accounting valuation reflects the following assumption changes:
– A change in the Discount rate to 2.21% as of June 30, 2020
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Required Supplementary Information
June 30, 2022
(Unaudited)
58 (Continued)
– A removal of the excise tax on high-cost plans from the future trend rates.
• The 2019 valuation implemented the following refinements:
– The financial accounting valuation reflects the following method changes:
■ There were no method changes in the financial accounting valuation.
• The financial accounting valuation reflects the following assumption changes:
– A change in the Discount rate to 3.50% as of June 30, 2019
– A change in the mortality assumption for healthy lives from the RP-2014 Aggregate Mortality
Table projected using the Scale MP-2016 to Pub-2010 Aggregate Mortality Table projected
using the Scale MP-2018 by classification.
– A change in the mortality assumption for disabled lives from the CIA 1988-94 LTD table to the
Pub-2010 Disable Mortality Table projected using Scale MP-2018.
– The health care trend rate assumption was updated to a schedule of rates beginning at 6.65%
in 2019, grading down to 4.50% in 2028 and beyond for pre-65 participants and 7.61% in 2019
grading down to 4.50% in 2029 and beyond for post-65 participants.
– The marginal cost adjustment factors were changed from 60.1% to 62.9% for pre-65
participants and from 87.6% to 89.5% for post-65 participants.
– The impact of the excise tax on high-cost plans due to healthcare reform was updated, based
on current claims and medical trend assumptions.
• The 2018 valuation implemented the following refinements:
– The financial accounting valuation reflects the following method changes:
■ There were no method changes in the financial accounting valuation
• The financial accounting valuation reflects the following assumption changes:
– A change in the discount rate to 3.87% as of June 30, 2018. The discount rate was 3.58% as
of June 30, 2017.
– A change in demographic assumptions for the Merit employees from the State assumptions to
the University staff assumptions.
STATE UNIVERSITY OF IOWA,
UNIVERSITY OF IOWA HOSPITALS AND CLINICS
Notes to Required Supplementary Information
June 30, 2022
(Unaudited)
59
• The 2017 valuation implemented the following refinements:
– The financial accounting valuation reflects the following method changes:
■ A change in the actuarial cost method from Projected Unit Credit to Entry Age Normal.
■ The financial accounting valuation reflects the following assumptions changes:
■ A change in the discount rate to 3.58% as of June 30, 2017. The discount rate was 6.75%
as of June 30, 2016.
■ A change in the withdrawal rates for staff to better anticipate future experience
■ A change in the mortality assumption from the RP-2014 Aggregate Mortality Table
projected using Scale MP-2014 to the RP-2014 Aggregate Mortality Table projected using
Scale MP-2016
■ The health care trend rate assumption factors were changes from 59.4% to 60.1% for
pre-65 participants and from 86.8% to 87.6% forpost-65 participants.
■ The impact of the Excise Tax on high-cost plans due to healthcare reform was updated,
based on current claims and medical trend assumptions.
■ A change in demographic assumptions for the Merit employees from the State
assumptions to the University staff assumptions.
