Hospital Margins to Stay Low Through 2025 Amid High Labor Costs
Chief Healthcare Executive
|
Contributed by: Kate Gamble
Summary
Moody's Ratings has forecasted that hospital margins will remain below historical averages until 2025, primarily due to high labor costs. While some hospitals have seen a financial rebound, the persistent expenses related to staffing represent a significant hurdle. The report notes a decline in median operating cash flow for nonprofit hospitals from 8.5% in 2019 to 4.9% in 2022, with a modest increase to 5.3% in 2023, largely attributed to escalating expenses. Staffing shortages, particularly among nursing and essential roles, along with competition for qualified personnel, continue to challenge healthcare systems and contribute to financial strain.
