Report: Skyrocketing hospital administrative costs, burdensome commercial insurer policies affecting patient care 

Hospitals and health systems are seeing significant increases in administrative costs, including due to burdensome practices by commercial insurers that often delay and deny care for patients, according to a new report released Sept. 10 by the AHA. 

“Many hospitals and health systems are forced to dedicate staff and clinical resources to appeal and overturn inappropriate denials, which alone can cost billions of dollars every year,” the report notes. 

Among other findings, the report highlights recent data from Strata Decision Technology showing that administrative costs alone account for more than 40% of total expenses hospitals incur in delivering care to patients. In addition, between 2022 and 2023, care denials increased an average of 20.2% and 55.7% for commercial and Medicare Advantage claims, respectively. 

“Hospitals and health systems already face many pressures that make their ability to care for communities more challenging,” the report notes. “We shouldn’t allow insurers or others to add to that with costly administrative practices that burden already overwhelmed health care professionals and decrease patient access to care.” 

For more on the significant financial pressures that continue to challenge hospitals’ ability to provide 24/7 care for the patients and communities they serve, see the recent AHA Costs of Caring Report.