The Current State of Hospital Finances: Fall 2022 Update
Since the onset of the COVID 19 pandemic in March 2020, our nation’s hospitals and health systems have coped with intense pressure on staff and resources.
As hospital executives, policymakers, and other stakeholders assess the current landscape, key findings about recent and projected future performance through the rest of 2022 include:
- Margins remain depressed relative to pre-pandemic levels. After a difficult first half of 2022, optimistic projections for the rest of the year indicate margins will be down 37% relative to pre-pandemic levels.
- More than half of hospitals are projected to have negative margins through 2022. Projections for the remainder of the year demonstrate an increase in hospitals with negative margins relative to pre-pandemic levels, to 53%.
- Expenses are significantly elevated from pre-pandemic levels. Expenses are projected to increase throughout the rest of 2022, leading to an increase of nearly $135 billion over 2021 levels. Labor expenses are projected to increase by $86 billion, while non-labor expenses are projected to increase by $49 billion.
- Hospitals have faced a profound financial toll. Hospitals have incurred serious losses in 2022 relative to pre-pandemic levels and future federal support is uncertain.
Hospitals also are facing a host of other related challenges, including workforce shortages, supply disruptions, and rising expenses.
Ultimately, U.S. hospitals are likely to face billions of dollars in losses in 2022 under both optimistic and pessimistic models, which would result in the most difficult year for hospitals and health systems since the beginning of the pandemic with no foreseeable federal support.
These findings underscore the broad and serious threats America’s hospitals have faced and continue to face in 2022 caring for their communities throughout unprecedented challenges.