Hospitals and health systems are under significant financial strain due to rising costs driven by workforce shortages, supply chain issues, and inflation, as reported by the American Hospital Association. CMS reimbursement rates have not kept up with these increasing expenses, putting additional financial pressure on hospitals that provide essential services, particularly in rural areas. Administrative costs are rising due to commercial payer practices, such as claims denials and prior authorization requirements, further burdening hospitals. Drug and supply costs have also surged, exacerbated by drug shortages and the need for new medical technologies. Labor costs remain a critical issue, with significant expenses tied to contract labor and efforts to attract and retain staff. The AHA is calling for legislative and administrative actions to mitigate these challenges and ensure continued access to care.
