Report: Hospitals face existential challenge from rising costs of care 

After three years of unprecedented challenges caring for COVID-19 patients and others, America’s hospitals and health systems face a new existential challenge from the rising costs of care, according to a report released April 20 by the AHA. Between 2019 and 2022, overall hospital expenses increased by 17.5% while Medicare reimbursement rose just 7.5%; contract labor expenses rose 258% as hospitals relied more on contract labor to fill workforce gaps; drug expenses per patient rose 19.7% as the median price for a new drug surpassed $200,000; and hospital supply expenses per patient rose 18.5% overall, and nearly 33% for ventilators, respirators and other emergency supplies. 

“Rising costs for drugs, supplies, and labor coupled with sicker patients, longer hospital stays and government reimbursement rates that do not come close to covering the costs of caring for patients have created a dire situation for hospitals and health systems,” said AHA President and CEO Rick Pollack. “This is not just a financial problem, it is an access problem. When health care providers cannot afford the tools and teams they need to care for patients, they will be forced to make hard choices and the people who will be impacted the most are patients. We can’t let that happen. Congress and others must act to preserve the care our nation needs and depends on.”