As hospitals prepare for the increase in costs linked to the proposal rates of President Donald Trump, a new report by the American Hospital Association reveals that drugs and supplies are only part of the problem.
In general, hospital expenses constantly rise, promoted by the chronic insufficient payments of the payers, the growing administrative requirements and the increase in labor costs. Below are three key details of the AHA report.
The insufficient payments of Medicare and Medicaid are totaling hundreds of billions of dollars per year.
The provision of care is becoming more expensive for hospitals as the American population ages and more patients arrive with serious health problems. This challenge is exacerbated by the fact that a growing number of these patients is secured through Medicare or Medicaid, which generally pay hospitals less than these are real costs to treat someone.
In 2022, Medicare and Medicaid paid the hospitals $ 130 billion less than it is a real cost to provide attention. Medicare only reimbursed 82 cents for each dollar spent in patient care, leading to a loss of $ 100 billion only by Medicare, according to the report.
Approximately time, these deficits have added. In the second half of the 2010, the insufficient payments of Medicare and Medicaid reached more than $ 500 billion, which is 40% more than in the first half of the decade, equal to the same after taking into account inflation.
The hospitals are not reimbursed for the tens of billions of dollars that spend every year fighting the denials of unfair claims.
Hospitals face the increase in administrative costs largely due to the practical curves of commercial insurers, including the advantages of Medicare and the medical care plans. While premiums increased twice as quickly as hospital prices in 2023, commercial insurers have added tension through automated denials of excessive claims and demands.
Researchers estimate that hospitals spend $ 10 billion per year only prior authorization, as well as another $ 20 billion of attractive claims, approximately half or what they are for the attention that the report owes, according to the first place.
In 2023, the negations of the plan increased almost 56%, and many of these ended too later. But even when coverage denials overlap, hospitals are not reimbursed by time and cost dedicated to fighting them.
Labor costs represent 60% or the total expenses of hospitals.
Salaries and benefits for hospital workers have grown much faster than general inflation during the last decade, according to the report.
Hospital’s labor costs increased by more than $ 42.5 billion from 2021 to 2023, reaching $ 839 billion, which is almost 60% of the total hospitals expenses. Only in 2023, hospitals, $ 51.1 billion in personnel expensive contract to cover the shortage of the workforce, especially in rural areas.
The contractual labor expense has decreased from the pandemic peak, but remains high and continues to forcing hospital budgets. It is also important to remember that labor costs are highly sensitive to personnel scarcity, the report said.
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