After two years on the front lines in the battle against this pandemic, hospitals and health systems have seen a dramatic rise in costs of labor, drugs, supplies and equipment. Coming on top of economywide inflation, this puts enormous pressure on our ability to provide care.

Labor cost per patient increased 19% from 2019 through 2021. By the end of 2021, average hospital drug expenses were 28% higher than prepandemic levels and 37% higher per patient. In addition, people put off care during the pandemic, coming to the hospital sicker and requiring more resources.

Medicare and Medicaid, which account for more than 60% of care provided by hospitals, reimburse hospitals less than the cost of providing care, and their reimbursement rates are nonnegotiable. Combined underpayments from Medicare and Medicaid to hospitals were $100 billion in 2020, up from $76 billion in 2019.

Related News Articles

Headline
A JAMA study published yesterday analyzed the health characteristics of individuals projected to lose Medicaid coverage due to work requirements included in…
Headline
The Centers for Medicare & Medicaid Services Sept. 30 issued a memo, through the Health Plan Management system, finalizing the Medicare Advantage…
Headline
The Centers for Medicare & Medicaid Services Sept. 30 released guidance to states clarifying its interpretation of a provision that…
Headline
The AHA Sept. 29 sent recommendations to the Department of Health and Human Services and the Centers for Medicare & Medicaid Services to help ensure…
Headline
The Centers for Medicare & Medicaid Services announced Sept. 26 that average premiums for Medicare Advantage and Part D would decline slightly in 2026.…
Headline
The AHA expressed support Sept. 22 to House and Senate sponsors of the Medicare Advantage Prompt Pay Act (H.R. 5454/S. 2879), legislation that would apply a…