1 min read

'Incredibly Difficult' Financial Trouble Ahead for Hospitals

KaufmanHall's Fall 2022 Hospital Outlook report paints a grim picture for the hospital industry in the second half of the year. According to the report, many hospitals will experience "incredibly difficult" financial challenges throughout the rest of the year.

Compared to pre-pandemic levels, KaufmanHall is optimistically projecting hospital margins will be down 37% for the 2nd half of 2022. However, a Fall/Winter COVID surge could result in operating margins 133% lower than 2019 levels. Without any new federal support promised, this could amount to billions of dollars in losses for U.S. hospitals.

In an interview at the Detroit Auto Show on September 18th, President Biden told CBS News, ‘The pandemic is over.’ This statement hints that further federal funds will be unlikely.

Financial trouble for hospitals this year is widespread. 53% of hospitals are projected to end 2022 with negative margins. This is largely due to the increased costs associated with caring for COVID patients, as well as the high contract labor rates that remain 500x higher than pre-pandemic levels. Labor costs, which are typically half of a hospital’s total expenses, are projected to be $57 billion higher than they were just a year ago.

These findings and predictions from KaufmanHall highlight the dire financial situation that many hospitals will find themselves in over the next year. Without additional support, many hospitals will be forced to make difficult decisions that could impact patient care.

Read the full report here –

KaufmanHall – The Current State of Hospital Finances: Fall 2022 Update

1 min read

'Incredibly Difficult' Financial Trouble Ahead for Hospitals

KaufmanHall's Fall 2022 Hospital Outlook report paints a grim picture for the hospital industry in the second half of the year. According to the...

Read More

4 min read

This Hospital Culture Change Sustainably Reduces Labor Costs

Before we kickoff the final post of our strategic cost management series, let’s take a quick detour. Imagine you are the winner of a DIY contest at...

Read More

4 min read

Hospitals: Benchmarking is Not a Cost Reduction Strategy

In healthcare, benchmark studies and productivity reports are the gold standard for leaders looking to make their facilities more efficient, provide...

Read More