UI Health Care cites medical advances and strong care outcomes, warns of financial uncertainty tied to Medicaid-directed payment changes and pauses some tower-s

University of Iowa Health Care leaders on Wednesday told the Board of Regents' UI Health Care Committee that medical advances and strong outcomes — including national specialty rankings and a neonatal survival milestone — sit alongside rising financial uncertainty from pending federal Medicaid changes that could affect long-range capital planning.

UI Health Care Vice President for Medical Affairs Denise Jamieson opened with clinical highlights: the hospital was again ranked the top hospital in Iowa by U.S. News & World Report and earned national recognition in multiple specialties; Jamieson said advances in cystic fibrosis research at the University of Iowa and new drugs such as Trikafta have transformed life expectancy for many patients. She highlighted a recent neonatal survival case in which a baby born at 21 weeks survived and went home after a six-month hospitalization.

But Brad Hawes, CEO of the clinical enterprise, described a shifting financial landscape. Hawes said the last several months had been "the most fluid" he had seen outside the COVID-19 period and warned that proposed federal changes to Medicaid-directed payments could cut funding over a multi-year cycle. University staff estimated the national policy shift could represent roughly $10 billion statewide across Medicaid over 10 years and suggested the system-level impact could approach $2 billion for Iowa hospitals in the same period; UI Health Care officials said they are studying implications for the clinical enterprise that will begin in 2028 under current timelines.

Because the federal changes are substantial and subject to CMS rule-making, UI Health Care leaders said they are reassessing the scope and timing of major capital projects. Hawes said that while the clinical enterprise is in a stronger position than many hospitals, the system has temporarily slowed some deliverables tied to the Jacobson inpatient tower demolition and related site work so the plan can be reviewed and the project redesigned to ensure affordability under new financial assumptions.

Why it matters: UI Health Care is the state's largest academic medical center and a primary referral center for complex care. Federal Medicaid policy changes could reshape hospital funding and influence the pace and scope of facility modernization, teaching programs and specialty services.

Fiscal snapshot and next steps For fiscal 2025, UI Health Care reported net operating revenue above original budget but operating expenses also higher, leaving an operating loss on an adjusted basis when accounting for potential changes to directed payments. Staff reported $3.5 billion in net operating revenue for the clinical enterprise and said about $660 million was invested in capital projects during the fiscal year. UI Health Care officials said they will continue scenario planning and redesign efforts and return to the board with revised capital plans and budget scenarios.

What the committee did not do The committee did not cancel the Jacobson Tower project or revoke pledged gifts; leaders said donors remain engaged and that no gift agreement contained a hard deadline requiring the university to break ground by a specific date.

Quotes "We are once again ranked the number 1 hospital in Iowa," Jamieson told the committee. "We are in the top 50 for multiple adult specialties." CEO Hawes said: "The last few months in health care, I think, have been the most fluid that I've seen in my career."