Kaufman Hall publishes 2025 Health System Performance report

Kaufman Hall has published a new report titled "2025 Health System Performance Outlook: Redefining performance in an era of financial pressure.” This analysis summarizes key trends that affected hospital performance, finances, and strategic planning.

Some of the factors listed were tariffs, reimbursement, staff turnover and shortages, hospital space/capacity, and reimbursement. 103 hospitals participated in the survey. Key findings:

• More than half (59%) of participants reported a 6-10% increase in non-labor expenses in 2025. 21% of respondents reported 11-20% increases, while 20% observed increases under 5% or none.
• Less than half of hospitals represented in the survey use artificial intelligence (AI) in their supply chain departments. The most listed uses were for logistics/distribution efficiency, demand forecasting, and supplier performance.
• Hospitals are making efforts to address staffing issues and expenses like “benchmarking or comparing current staffing targets to peers” and “adjusting staffing targets in non-clinical or support departments.”
• More than 80% of participants are addressing staff shortages by offering higher starting salaries and signing bonuses. More than 60% are offering remote work opportunities.
• High denial rates and administrative burden were cited as the most significant challenge participants are currently facing related to managed care.
• Most hospitals’ (96%) clinical documentation integrity (CDI) programs are centered on inpatient hospital billing.
• 81% of participants are taking steps to improve performance, but 44% said they don’t have enough time or resources to do this.

Kaufman Hall also provides guidance from experts on how to mitigate these challenges. Additional findings can be found in the full report.