Hospitals face mounting financial pressures amid declining margins, rising expenses

Medical Economics January 10, 2025
Todd Shryock

Key Takeaways

• Operating margins for U.S. hospitals and health systems narrowed in November 2024 due to declining patient demand and rising expenses.
• Rising labor and non-labor expenses exacerbated financial pressures, with significant year-over-year increases in purchased services and labor costs.
• Despite declining patient volumes, gross hospital revenues grew year-over-year, although they declined month-over-month.
• Mergers and acquisitions surged in 2024, with a record percentage of transactions involving financially distressed organizations.
• Experts anticipate continued challenges in 2025, emphasizing the importance of predictive analytics for financial planning.

Financial sustainability of some hospitals comes into question

Hospitals and health systems across the U.S. saw operating margins narrow in November, driven by a combination of declining patient demand and rising expenses, according to...

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