The American Hospital Association (AHA) published an analysis calling attention to hospital and health system financial challenges.
According to an AHA release, the report “explains how hospitals have raised wages to recruit and retain staff amid workforce shortages and how Medicare and Medicaid continue to underpay hospitals for patient care as shortfalls worsen.” Additionally, tariff uncertainty is another burden.
Key findings:
· Hospitals spend more than half of their budget on labor (56%).
· Medicare and Medicaid reimbursements are not covering enough costs.
· Hospital expenses were higher than the inflation rate in 2024.
· Increasing “hospital costs are increasingly driven by higher utilization and acuity, especially among patients with chronic conditions.”
· Patients are staying in the hospital longer.
