/ en Wed, 30 Apr 2025 03:48:11 -0500 Wed, 30 Apr 25 06:00:00 -0500 /costsofcaring <div class="container"><div class="row"><div class="col-md-8"><h2>Introduction</h2><p>America’s hospitals and health systems are the cornerstone of the nation’s health care system, providing life-saving care to millions of patients each year. However, hospitals face a perfect storm of financial pressures: persistent cost growth, inadequate reimbursement, and shifting care patterns driven by both policy changes and an older, sicker population with more complex, chronic conditions. Hospitals are struggling to maintain access to essential services amid workforce shortages, supply chain disruptions, tariffs and policy decisions that often fail to reflect on-the-ground realities.</p><p>This report outlines the key trends impacting hospital financial stability in 2025.</p><h2>Hospital Expenses Have Surged and Remain Elevated</h2><h3>Labor Costs Dominate Hospital Expenses</h3><p><img src="/sites/default/files/inline-images/Figure-1-Labor-spend-still-dominated-hospital-expenses-in-2024_0.png" data-entity-uuid="2549d942-1df8-4906-b89f-4b2a3e7b16c1" data-entity-type="file" alt="Figure 1. Labor spend still dominated hospital expenses in 2024. Labor: 56%; $890 billion. Other: 22%; $352 billion. Supplies: 13%; $202 billion. Drugs: 9%; $144 billion. Note: Average expenses estimated by industry benchmark data from Strata Decision Technology, LLC. Labor is inclusive of purchased services and professional fees." width="485" height="457" class="align-right">Hospitals are among the few sectors that consistently employ a highly educated, highly paid workforce — anchoring local economies with middle- and high-skill jobs that cannot be outsourced or automated. Consequently — and despite growth in drug spending and other fast-rising non-labor costs — labor remains the single largest category of hospital spending. Total compensation and related expenses now account for 56% of total hospital costs (see Figure 1). Amid ongoing workforce shortages, hospitals offer competitive wages to retain and recruit staff. According to AHA analysis of Lightcast data, advertised salaries for registered nurses have grown 26.6% faster than the rate of inflation over the past four years. These increases are essential to maintain staffing levels but also contribute to the overall financial challenges hospitals face.</p><h3>Medicare and Medicaid Reimbursements Are Not Keeping Up With the Cost of Caring</h3><p><img src="/sites/default/files/inline-images/Figure-2-Inflation-Overshadows-IPPS-Net-Payment-Increases-FY-2022-to-2024.png" data-entity-uuid="dcf8f08c-3781-4459-9678-f45197fbc0e9" data-entity-type="file" alt="Figure 2. Inflation Overshadows IPPS Net Payment Increases, FY 2022 to 2024. Inflation: 14.1%. IPPS increases: 5.1%. Note: Net IPPS payment increase from FY2022-2024 market basket updates. Inflation measured using CPI-U from BLS using data between October of 2021 and October of 2024." width="484" height="403" class="align-right">Despite escalating expenses, Medicare reimbursement continues to lag behind inflation — covering just 83 cents for every dollar spent by hospitals in 2023, resulting in over $100 billion in underpayments, according to AHA analysis of AHA Annual Survey data. From 2022 to 2024, general inflation rose by 14.1%, while Medicare net inpatient payment rates increased by only 5.1% — amounting to an effective payment cut over the past three years (see Figure 2).</p><p>The AHA estimates that this erosion in payment value due to inflation resulted in $8.4 billion in lost hospital revenue during that period, further straining hospitals’ ability to care for Medicare beneficiaries, who make up a large share of most hospitals’ patients. In total, hospitals absorbed $130 billion in underpayments from Medicare and Medicaid in 2023 alone. These shortfalls are worsening — growing on average 14% annually between 2019 and 2023.</p><h3>Hospital Expenses are Growing Faster Than Inflation</h3><p>Specifically, in 2024 alone, total hospital expense grew 5.1%, significantly outpacing the overall inflation rate of 2.9%. Though expense growth has started to slow in 2025, it remains elevated — particularly in areas driven by labor and supply chain pressures. Persistent expense growth threatens hospitals’ solvency and their ability to sustain comprehensive services in the communities they serve. A telling indicator of this strain is the average age of plant — a measure of the age of hospital infrastructure — which has risen by more than 10% over the last two years, according to industry benchmark data from Strata Decision Technology, LLC. This trend suggests that hospitals are increasingly unable to reinvest in critical physical assets, such as medical equipment, operating rooms and facility upgrades. Delayed capital improvements not only jeopardize care quality but also hinder hospitals’ ability to keep pace with evolving health care standards and technology.</p><h3>Impact of Chronic Disease Burden Costs Driven by Increased Utilization</h3><p>Rising hospital costs are increasingly driven by higher utilization and acuity, especially among patients with chronic conditions. According to the Centers for Medicare & Medicaid Services (CMS), recent growth in spending on hospitals reflects increased service intensity and use.<a href="#fn1"><sup>1</sup></a> For example, emergency department (ED) visits related to heart failure increased 126.7% per capita between 2010 and 2019 (see Figure 3), with associated spending growing 177.2%. Similar patterns are observed for type 2 diabetes and acute renal failure — some of the costliest conditions in terms of patient health and resource use. These trends underscore the demand-side pressures fueling cost growth.</p><img src="/sites/default/files/inline-images/Figure-3-Hospital-ED-Cost-Growth-for-Privately-Insurance-Patients-Driven-by-Increased-Utilization_0.png" data-entity-uuid="c82f1a54-9687-4310-8eb7-944970fa7b48" data-entity-type="file" alt="Figure 3. Hospital ED Cost Growth for Privately Insured Patients Driven by Increased Utilization. Heart Failure: 177.2% Total spending; 126.7% Encounters per capita. Acute renal failure: 56.5% Total spending; 50.0% Encounters per capita. Diabetes mellitus: 75.3% Total spending; 42.6% Encounters per capita. Note: AHA analysis of the data from the Institute of Health Metrics and Evaluation (IHME). Unitied States Health Care spending by Health Condition and County (2010-2019)." width="1039" height="423"><h2>The Growing Impact of Medicare Advantage on Hospital Finances</h2><h3>Observation Stays Are Increasing in Duration</h3><p><img src="/sites/default/files/inline-images/Figure-4-MA-Drives-Longer-Observation-Stays.png" data-entity-uuid="25bdfc97-fde8-4e32-be35-e8947ed26284" data-entity-type="file" alt="Figure 4. MA Drives Longer Observation Stays. Percent Longer MA Observation Stay Compared to Traditional Medicare. 2019: 28.6%. 2024: 36.9%. Note: Data from industry benchmark data from Strata Decision Technology, LLC." width="485" height="580" class="align-right">Medicare Advantage (MA) plans have long relied on extended observation stays to avoid admitting patients as inpatients — a strategy that helps plans reduce costs but shifts financial burden onto hospitals. Recent data show that this practice is worsening. In 2019, MA patients had observation stays 28.6% longer than those in Traditional Medicare; by 2024, the gap widened to 36.9% (see Figure 4). These prolonged observation stays drive up hospital costs without a corresponding increase in reimbursement, further straining hospital finances. Compared to inpatient admissions, observation stays are reimbursed at lower rates — or in some cases, not at all — leaving hospitals to absorb much of the cost. In 2024, MA plans reimbursed just 49% of the actual cost for patients held in observation status, according to industry benchmark data from Strata Decision Technology, LLC.</p><h3>Longer Stays, Lower Payments</h3><p>The inpatient setting reveals a similar pattern: longer stays for MA patients but with lower reimbursement. From 2019 to 2024, the average length of stay for MA patients grew substantially compared to Traditional Medicare — more than doubling the gap over this period, according to industry benchmark data from Strata Decision Technology, LLC. Yet during the same timeframe, hospital reimbursement from MA plans fell by 8.8% on a cost basis. In other words, hospitals are being asked to do more with less.</p><h3>Discharge Delays Are Compounding the Problem</h3><p><img src="/sites/default/files/inline-images/Figure-5-MA-Delays-Discharges-to-Post-Acute-Care.png" data-entity-uuid="d76d655b-ff83-40d7-a6f0-f179c94a93a6" data-entity-type="file" alt="Figure 5. MA Delays Discharges to Post-Acute Care. Percent Longer MA Stay Compared to Traditional Medicare. 2019: 6.4%. 2020: 6.0%. 2021: 10.5%. 2022: 14.7%. 2023: 13.9%. 2024: 12.6%. Note: Data from industry benchmark data from Strata Decision Technology, LLC." width="592" height="434" class="align-right">Delays in discharging patients to post-acute care facilities are a growing contributor to longer inpatient stays. These delays are often driven by prior authorization requirements or insufficient post-acute provider networks within MA plans. Among MA patients, the average length of stay prior to discharge to post-acute care has doubled relative to Traditional Medicare between 2019 and 2024 (see Figure 5). These delays lead to higher costs, increased hospital crowding — including in the emergency department — and longer lengths of stay. In some cases, plans may use these delays to steer patients toward lower-cost care settings — or avoid post-acute care altogether — while the hospital continues to absorb the cost of care. A Senate Permanent Subcommittee report recently found that some MA plans disproportionately imposed prior authorization and claim denials on post-acute care, exacerbating delays and shifting costs to hospitals.<a href="#fn2"><sup>2</sup></a> Post-acute care providers also have faced lagging reimbursement rates from Medicare, which has exacerbated staffing challenges and made it difficult to accommodate discharge requests from acute-care hospitals.</p><h3>Lower Reimbursement and Increasing Administrative Burden</h3><p>Hospitals are increasingly reporting lower negotiated MA rates than Traditional Medicare for many common inpatient services (see Figure 6). These discrepancies continue to create significant financial challenges for hospitals, especially for those in rural areas that have seen relatively fast growth in the volume of MA beneficiaries in recent years.<a href="#fn3"><sup>3</sup></a></p><img src="/sites/default/files/inline-images/MA-Negotiated-Rates-as-a-Percentage-of-Traditional-Medicare-Rates-Selected-DRGs.png" data-entity-uuid="062e44a9-197b-4ab3-b674-4c5bff0ce4e5" data-entity-type="file" alt="MA Negotiated Rates as a Percentage of Traditional Medicare Rates, Selected DRGs. MS-DRG 190 Chronic Obstructive Pulmonary Disease: 96.5% of FFS rates. MS-DRG 280 Acute Myordial Infarction: 96.2% of FFS rates. MS-DRG 470 Major Joint Replacement or Reattachment of Lower Extremity: 97.6% of FFS rates. Note: AHA analysis of hospital price transparency data from Turquoise Health. Figures calculated by dividing hospital-level median MA rates by hospital-specific baseline FFS rates. Outliers excluded (5th and 95th percentiles)." width="1062" height="289" class="align-center"><p>At the same time, administrative complexity continues to increase. MA plans issued nearly 50 million prior authorizations in 2023 — up more than 40% since 2020, according to KFF.<a href="#fn4"><sup>4</sup></a> A Premier study found that hospitals spent $26 billion in 2023 managing insurance claims — a 23% increase over the previous year.<a href="#fn5"><sup>5</sup></a></p><p>Notably, 70% of denied claims were eventually paid, but only after multiple costly reviews. These burdens not only strain hospitals financially but also delay care and divert clinical staff from patient care. A Morning Consult survey commissioned by the AHA found that 85% of clinicians report that prior authorization and other requirements delay necessary care.</p><h2>Impact of Tariffs on Hospital Costs</h2><p>Hospitals and health systems rely on the right medicines, devices and other supplies used at the right time to support the delivery of safe and effective care. The supply chain for these essential medical goods is complex, weaving together both domestic and international sourcing, and is prone to significant disruption. For example, as of March 2025, there were 270 active drug shortages in the U.S., including shortages of life-saving intravenous (IV) fluids stemming from Hurricane Helene in 2024.<a href="#fn6"><sup>6</sup></a> Recent changes in U.S. trade policy are creating additional uncertainty, with the Administration implementing new tariffs that affect medical devices and supplies, and considering new tariffs on pharmaceuticals. Tariffs on these critical goods could exacerbate shortages, disrupt patient care and raise costs for hospitals.</p><p>Despite efforts to bolster the domestic supply chain, a significant proportion of essential medical goods come from international sources. For example, nearly 70% of medical devices marketed in the U.S. are manufactured exclusively overseas.<a href="#fn7"><sup>7</sup></a> In 2024 alone, the U.S. imported over $75 billion in medical devices and supplies, according to AHA analysis of Census Bureau data. These imports include many lowmargin, high-use essentials in hospital settings — such as syringes, needles, blood pressure cuffs, and IV saline bags. Hospitals rely on imports for advanced surgical tools and other critical technologies as well.</p><p>Moreover, hospitals rely on international sources for a significant proportion of the protective equipment for their caregivers. In 2023, Chinese manufacturers supplied the majority of N95 and other respirators used in health care. Additionally, China was the source for one-third of disposable face masks, two-thirds of non-disposable face masks, and 94% of the plastic gloves used in health care settings.<a href="#fn8"><sup>8</sup></a></p><p>Many pharmaceuticals — and especially the key starter ingredients that go into them — also are sourced from overseas. The U.S. gets nearly 30% of its active pharmaceutical ingredients (APIs) from China.<a href="#fn9"><sup>9</sup></a> According to a 2023 Department of Health and Human Services estimate, over 90% of generic sterile injectable drugs — such as certain chemotherapy treatments and antibiotics — depend on key starter materials from either India or China.<a href="#fn10"><sup>10</sup></a> Even temporary disruptions in access to medication and supplies can impact care and increase the risk of patient harm.</p><p>Tariffs on medical imports could significantly raise costs for hospitals. A recent survey found that 82% of health care experts expect tariff-related expenses to raise hospital costs by at least 15% over the next six months, and 94% of health care administrators expected to delay equipment upgrades to manage financial strain.<a href="#fn11"><sup>11</sup></a> Tariffs also may force hospitals to seek new vendors — often at higher cost or with lower reliability. In fact, 90% of supply chain professionals are expecting procurement disruptions.<a href="#fn12"><sup>12</sup></a></p><h2>Conclusion: Supporting Hospitals Means Supporting Patients</h2><p>Hospitals are not only centers of care but also vital economic engines in their communities. Rising costs, inadequate reimbursement, and policy-driven inefficiencies jeopardize the ability of hospitals to deliver high-quality, timely care. To ensure that hospitals can continue to serve patients and communities, policymakers should:</p><ul class="arrow"><li class="arrow">Recognize that rising expenses reflect real pressures, such as labor shortages and increasing demand — not inefficiency.</li><li class="arrow">Acknowledge Medicare and MA payment policies must be updated to reflect the actual cost of care.</li><li class="arrow">Address structural drivers of cost, such as care delays and excessive administrative burdens, instead of simply cutting payments.</li></ul><p>As we look to the future, preserving access to hospital care should be a national priority. Supporting hospitals means supporting patients, communities and the entire health care system.</p><hr><h2>Notes</h2><ol><li id="fn1"><a href="https://www.healthaffairs.org/doi/10.1377/hlthaff.2024.01375" target="_blank">healthaffairs.org/doi/10.1377/hlthaff.2024.01375</a></li><li id="fn2"><a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a></li><li id="fn3"">aha.org/system/files/media/file/2025/02/growing-impact-of-medicare-advantage-on-rural-hospitals.pdf</li><li id="fn4"><a href="https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/" target="_blank">kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/</a></li><li id="fn5"><a href="https://premierinc.com/newsroom/blog/claims-adjudication-costs-providers-25-7-billion" target="_blank">premierinc.com/newsroom/blog/claims-adjudication-costs-providers-25-7-billion</a></li><li id="fn6"><a href="https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics?loginreturnUrl=SSOCheckOnly" target="_blank">ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics?loginreturnUrl=SSOCheckOnly</a></li><li id="fn7"><a href="https://www.medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/" target="_blank">medicaldevice-network.com/analyst-comment/trump-tariffs-us-medical-device-market/</a></li><li id="fn8">AdvaMed presentation, 2023.</li><li id="fn9"><a href="https://www.atlanticcouncil.org/blogs/econographics/the-us-is-relying-more-on-china-for-pharmaceuticals-and-vice-versa/" target="_blank">atlanticcouncil.org/blogs/econographics/the-us-is-relying-more-on-china-for-pharmaceuticals-and-vice-versa/</a></li><li id="fn10"><a href="https://aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf" target="_blank">aspe.hhs.gov/sites/default/files/documents/3a9df8acf50e7fda2e443f025d51d038/HHS-White-Paper-Preventing-Shortages-Supply-Chain-Vulnerabilities.pdf</a></li><li id="fn11"><a href="https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/" target="_blank">beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/</a></li><li id="fn12"><a href="https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/" target="_blank">beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/</a></li></ol></div><div class="col-md-4"><p><a href="/system/files/media/file/2025/04/The-Cost-of-Caring-April-2025.pdf" target="_blank" title="Click here to download the The Cost of Caring: Challenges Facing America’s Hospitals in 2025 report PDF."><img src="/sites/default/files/inline-images/Page-1-The-Cost-of-Caring-April-2025.png" data-entity-uuid="658521c4-19cc-4776-a588-acc23144a3be" data-entity-type="file" alt="The Cost of Caring: Challenges Facing America's Hospitals in 2025 page 1." width="695" height="900"></a></p><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/guidesreports/2025-04-28-2024-costs-caring" target="_blank">View the 2024 Costs of Caring Report</a></div><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/guidesreports/2024-09-10-skyrocketing-hospital-administrative-costs-burdensome-commercial-insurer-policies-are-impacting" target="_blank">View the Skyrocketing Hospital Administrative Costs, Burdensome Commercial Insurer Policies Are Impacting Patient Care Report</a></div><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/guidesreports/2024-05-01-2023-costs-caring" target="_blank">View the 2023 Costs of Caring Report</a></div><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/guidesreports/2023-04-20-2022-costs-caring" target="_blank">View the 2022 Costs of Caring Report</a></div><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/guidesreports/2021-10-25-2021-cost-caring" target="_blank">View the 2021 Costs of Caring Report</a></div></div></div></div> h2 { color: #9d2235; } h3 { color: #003087; } ul.arrow { list-style: none; margin-left: 20px; padding-left: 0; } li.arrow { padding-left: 1em; text-indent: 1em; } li.arrow:before { content: "🠲"; color: #003087; padding-right: 10px; margin-left: -42px; } Wed, 30 Apr 2025 06:00:00 -0500 Guides/Reports /guidesreports/2025-04-28-2024-costs-caring <div class="container"><div class="row"><div class="col-md-8"><h2><span>Introduction</span></h2><p><img src="/sites/default/files/inline-images/Figure-1-Labor-constitutes-largest-percentage-of-hospital-expenses.png" data-entity-uuid="d6c1793f-d4c3-44ea-8ba5-d1f15b6518e2" data-entity-type="file" alt="Figure 1. Labor constitutes largest percentage of hospital expenses. Labor: 60% ($839 Billion); Supplies: 13% ($181 Billion); Drugs: 8% ($115 Billion); Other: 19% ($269 Billion). Note: Average expenses estimated by Strata Decision Technology median 2023 values across all hospital spending. Labor is inclusive of purchased services and professional fees." width="718" height="752" id="figure1" class="align-right">Hospitals and health systems have been at the forefront of a major transformation while at a crossroads of increasing demand for higher acuity care and deepening financial instability. Persistent workforce shortages, severe fractures in the supply chain for drugs and supplies, and high levels of inflation have collectively fueled hospitals’ costs as they care for patients 24/7 (see <a href="#figure1">Figure 1</a>). At the same time, hospitals’ costs have been met with inadequate increases in reimbursement by government payers and increasing administrative burden due to inappropriate commercial health insurer practices.</p><p><strong>Taken together, these issues have created an environment of financial uncertainty where many hospitals and health systems are operating with little to no margin. While recent data suggest that some hospital and health system finances have experienced modest stabilization from historic lows in 2022, the hospital field is still far from where it needs to be to meet the demand for care, invest in new and promising technologies and interventions, and stand ready for the next health care crisis.</strong></p><p><img src="/sites/default/files/inline-images/Figure-2-Inflation-growth-was-more-than-double-the-growth-in-IPPS-reimbursement-2021-2023.png" data-entity-uuid="90ce5355-e63a-4187-bfae-5a641d891486" data-entity-type="file" alt="Figure 2. Inflation growth was more than double the growth in IPPS reimbursement, 2021–2023. Inflation: 12.4%; IPPS Increases: 5.2%. Note: Inflation calculated using annual average CPI-U between 2021 and 2023 from BLS. IPPS increase from FY2020–2023 market basket increases net of other adjustments." width="385" height="705" id="figure2" class="align-left">Fresh off a historically challenging year financially in 2022 in which over half of hospitals closed out the year operating at a loss, many hospitals spent much of 2023 simply struggling to break even.<a href="#fn1"><sup>1</sup></a> Economy-wide inflation grew by 12.4% between 2021 and 2023 – more than two times faster than Medicare reimbursement for hospital inpatient care (see <a href="#figure2">Figure 2</a>).</p><p>Since the start of 2022, the number of days cash on hand for hospitals and health systems has declined by 28.3%, according to data from Strata Decision Technology, which provides data and cloud-based financial planning, decision support and performance analytics solutions.<a href="#fn2"><sup>2</sup></a></p><p>Diverting dollars from their reserves to maintain access to care has required tradeoffs that have limited many hospitals and health systems from investing in updated infrastructure, new medical technology and equipment, and other clinical needs — particularly among those hospitals in severe financial distress.<a href="#fn3"><sup>3</sup></a><sup>,</sup><a href="#fn4"><sup>4</sup></a> For example, the average age of capital investments for medical equipment and infrastructure, after years of remaining relatively flat, increased by 7.1% for all hospitals in 2023, according to data from Strata Decision Technology. While the constraints and burdens of increasing plant age present serious challenges to hospitals and health systems in their own right, the inability to make needed capital investments has contributed to bond rating agencies issuing rating downgrades, making it harder for some hospitals and health systems to borrow money.<a href="#fn5"><sup>5</sup></a> Ongoing reimbursement challenges, made worse by crises like the recent Change Healthcare cyberattack, and increased operating costs create an unsustainable financial environment.<a href="#fn6"><sup>6</sup></a> While these challenges alone could cripple any organization, hospitals and health systems continue to face additional threats from ongoing Medicaid redeterminations increasing uncompensated care<a href="#fn7"><sup>7</sup></a>, regulatory changes that add operational burden, cyberattacks that threaten the health care infrastructure and potential legislation that would further cut Medicare payments to hospitals.</p><p>This report provides a snapshot of the current cost realities facing hospitals and health systems and how they impact their ability to care for patients and communities.</p><h2><span>1. Costs of Providing Essential Services</span></h2><p><img src="/sites/default/files/inline-images/Figure-3-Cumulative-Medicaid-and-Medicare-underpayments.png" data-entity-uuid="1846fd31-a865-4fcb-8de7-b4ca6bf1b3f2" data-entity-type="file" alt="Figure 3. Cumulative Medicaid and Medicare underpayments. 2013 to 2017: -$375 Billion; 2018 to 2022: -$522 Billion. Note: AHA Annual Survey 2013 to 2022 all dollars inflation adjusted to 2022 values using CPI-U from the BLS." width="620" height="672" id="figure3" class="align-right">Hospitals often play the critical — and sometimes only — role in providing access to essential health care services, such as emergency care and behavioral health, which are necessary for the health and well-being of the communities they serve. Further, oftentimes these are services that are not offered by other types of health care providers. In 2022, the most recent year for which data are available, hospitals admitted nearly 137 million patients in emergency departments and delivered over 3.5 million babies.<a href="#fn8"><sup>8</sup></a> Many of these essential services are extremely resource intensive and costly to offer. Further compounding this issue are demographic trends such as an aging population and clinical factors such as higher patient acuity. This has driven a steady rise in the share of inpatient utilization among more clinically complex patients covered by Medicare and Medicaid.<a href="#fn9"><sup>9</sup></a> Not only are inpatient services costlier to provide, but public payer payments for these services fall well below costs. In fact, underpayments from Medicare and Medicaid totaled nearly $130 billion in 2022, and Medicare paid just 82 cents for every dollar hospitals spent caring for patients — resulting in a shortfall of almost $100 billion.<a href="#fn10"><sup>10</sup></a> Troublingly, cumulative underpayments in the second half of the last decade totaled more than half a trillion dollars — a nearly 40% increase compared to the first half even after adjusting for inflation (see <a href="#figure3">Figure 3</a>).</p><p>However, the reimbursement challenges do not end with Medicare and Medicaid Reimbursement for some services consistently fall below costs across all payer types. For example, payments for inpatient behavioral health services were 34.3% below costs across all payers on average in 2023, according to data from Strata Decision Technology (see <a href="#figure4">Figure 4</a>). This is especially concerning given the increased utilization of behavioral health services over the last few years.</p><img src="/sites/default/files/inline-images/Figure-4-Hospital-payments-do-not-cover-the-costs-of-providing-vital-patient-services-20240612.png" data-entity-uuid="96ed5e28-677a-4ba0-8659-407033fe0a56" data-entity-type="file" alt="Figure 4. Hospital payments do not cover the costs of providing vital inpatient services. Average margin on services: Behavioral Health -34.3%; Nephrology -34.1%; Burns and Wounds -24.1%; Pulmonology -19.4%; Infectious Disease -15.3%. Note: AHA analysis of 2023 average service line payment and cost across all payers from Strata Decision Technology. Does not include supplemental payments from Medicaid." width="1565" height="623" id="figure4"><p>In the outpatient setting, average payments for costly burn and wound services were 42.9% below costs across all payers (see <a href="#figure5">Figure 5</a>). These shortfalls have been especially acute for government payers like Medicare. For example, average Medicare margins for behavioral health services were -38.9% in 2023.</p><img src="/sites/default/files/inline-images/Figure-5-Hospital-payments-also-fail-to-cover-the-costs-of-providing-essential-outpatient-services.png" data-entity-uuid="a43ea45f-a309-46a9-9acc-fb54b385b5b2" data-entity-type="file" alt="Figure 5. Hospital payments also fail to cover the costs of providing essential outpatient services. Average margin on services: Burns and wounds -42.9%; Nephrology -32.3%; Behavioral Health -31.7%; Pulmonology -17.5%; Infectious Disease -12.1%. Note: AHA analysis of 2023 average service line payment and cost across all payers from Strata Decision Technology. Does not include supplemental payments from Medicaid." width="1558" height="616" id="figure5"><p>Taken together, these data highlight the challenges that hospitals and health systems face in providing essential services that communities need. This is particularly true for hospitals in rural areas, where the financial challenges can be even more severe.</p><h2><span>2. Hospital Administrative Expenses</span></h2><p><span><em><strong><img src="/sites/default/files/inline-images/Figure-6-Premiums-grew-twice-as-fast-as-hospital-prices-in-2023.png" data-entity-uuid="d158d191-431b-4548-aebc-57269df046dc" data-entity-type="file" alt="Figure 6. Premiums grew twice as fast as hospital prices in 2023. Health Insurance Premiums: 6.7%; Hospital Prices: 2.6%. Note: Health insurance premiums represent premiums for a family of four, from KFF Employer Health Benefits Survey, 2023. Hospital Prices: BLS, annual average Producer Price index for hospitals." width="607" height="790" id="figure6" class="align-right">Some commercial health insurer practices increase hospital costs and delay care to patients</strong></em></span></p><p>Hospitals have seen significant growth in administrative costs due to inappropriate practices by certain commercial health insurers, including Medicare Advantage (MA) and Medicaid managed care plans. In addition to increasing premiums, which grew twice as fast as hospital prices in 2023, commercial health insurers have overburdened hospitals with time-consuming and labor-intensive practices like automatic claims denials and onerous prior authorization requirements (see <a href="#figure6">Figure 6</a>).<a href="#fn11"><sup>11</sup></a></p><p>A 2021 study by McKinsey estimated that hospitals spent $10 billion annually on dealing with insurer prior authorizations.<a href="#fn12"><sup>12</sup></a> Additionally, a 2023 study by Premier found that hospitals are spending just under $20 billion annually in appealing denials — more than half which was wasted on claims that should have been paid out at the time of submission.<a href="#fn13"><sup>13</sup></a> Denials issued by commercial MA plans rose sharply by 55.7% in 2023.<a href="#fn14"><sup>14</sup></a> Notably, many of these denials were ultimately overturned, consistent with a study by the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) that found 75% of care denials were subsequently overturned.<a href="#fn15"><sup>15</sup></a> These denials are particularly concerning because they often occur for medically necessary care, which can result in direct patient harm. In fact, a recent HHS OIG report found that nearly one in five MA denials met Medicare coverage rules, which meant that had they been paid via Medicare fee-for-service, they would have been paid without denial.<a href="#fn16"><sup>16</sup></a> Even when denials are ultimately overturned, hospitals are not paid for the costs incurred to navigate that burdensome and resource-intensive process. Making matters worse, MA plans paid hospitals less than 90% of Medicare rates despite costing taxpayers more than traditional Medicare in 2023.<a href="#fn17"><sup>17</sup></a><sup>,</sup><a href="#fn18"><sup>18</sup></a> Although partly a function of lower rates, the worsening administrative overload is simply costing hospitals more and more.</p><p>Though these issues are often felt most acutely with MA and Medicaid managed care plans, it also is true for other commercial payers, where claims denials increased by 20.2% in 2023. Moreover, the time taken by commercial payers to process and pay hospital claims from the date of submission increased by 19.7% in 2023, according to data from the Vitality Index. For hospitals and health systems, these practices result in billions of dollars in lost revenue each year, which require hospitals to divert dollars away from patient care to instead focus on seeking payment from commercial insurers.<a href="#fn19"><sup>19</sup></a> Without further intervention, these trends are expected to continue and worsen. National expenditures on the administrative costs of private health insurance spending alone are projected to account for 7% of total health care spending between 2022 and 2031 and are projected to grow faster than expenditures for hospital care.<a href="#fn20"><sup>20</sup></a></p><h3><span>Other expenses</span></h3><p>Hospitals also are spending more on things that are not direct patient care services but are still critical to delivering care and maintaining operations. For example, the costs associated with implementing, maintaining and upgrading information management systems and overall technology infrastructure, while critical to improving efficiency and quality of care, typically represent significant investments.</p><p>Additionally, given the confidential nature of patient data in these systems, hospitals have increasingly become targets for cyberattacks. As a result, the costs of defending against these attacks and protecting patient data has grown steadily.<a href="#fn21"><sup>21</sup></a> Health care data breaches are by far the costliest of any other sector.<a href="#fn22"><sup>22</sup></a> As cyberattacks and data breaches in health care have grown and regulators are requiring more robust protections, hospitals and health systems are finding themselves increasingly trying to invest in cybersecurity.<a href="#fn23"><sup>23</sup></a> Protecting against cyberattacks and other vulnerabilities is important to patient care, but is increasingly costly. In 2022, hospitals spent nearly $30 billion on property and medical liability insurance, according to data from Lightcast.</p><h2><span>3. Hospital Drug Expenses</span></h2><p>An area of persistent cost pressure for hospitals and health systems has been the rapid and sustained growth in drug expenses. Hospitals spent $115 billion on drug expenses in 2023 alone. One of the factors fueling this growth is drug company decisions to impose large price increases on existing drugs. However, 2023 also saw a continuation of a long-standing trend of drug companies introducing new drugs at record prices. In 2023, the median annual list price for a new drug was $300,000, an increase of 35% from the prior year (see <a href="#figure7">Figure 7</a>).<a href="#fn24"><sup>24</sup></a> A recent report by the HHS Assistant Secretary for Planning and Evaluation (ASPE) found that between 2022 and 2023, prices for nearly 2,000 drugs increased faster than the rate of general inflation, with an average price hike of 15.2%.<a href="#fn25"><sup>25</sup></a></p><img src="/sites/default/files/inline-images/Figure-7-Annual-List-Prices-of-Novel-Drugs-Launched-in-2023.png" data-entity-uuid="b88a70d2-300e-48d9-90f9-e3fbe3b80e83" data-entity-type="file" alt="Figure 7. Annual List Prices of Novel Drugs Launched in 2023*. Elevidys: $3,200,000; Roctavian: $2,900,000; Veopoz: $1,799,980; Altuviiio: $970,000; Pombiliti: $650,000; Talvey: $360,000; Orserdu: $280,526; Adzynma: $245,000; Zynyz: $170,880; Filspari: $129,965; Velsipity: $74,000; Leqembi: $26,000. Median price of new drug: $300,000. Median household: $74,580. Average price of a new car: $48,759. Source: Annual list prices of novel drugs launched in 2023 are from a Reuters survey of new drug costs. Median household income is from 2022 Census Bureau data. Average price of new care is from Kelly Blue Book new-vehicle transaction price in December 2023." width="1563" height="771" id="figure7"><p><img src="/sites/default/files/inline-images/Figure-8-Increase-in-drug-shortages-and-drug-prices-2022-2023.png" data-entity-uuid="e6973989-b4db-4b1f-a2ac-dd8b512598d6" data-entity-type="file" alt="Figure 8. Increase in drug shortages and drug prices, 2022–2023. 2022: Drug Shortages 8.0%; Drug Prices 11.5%. 2023: Drug Shortages: 13.0%; Drug Prices 15.2%. Note: Drug shortage data from Utah Drug Information System; Drug price data from ASPE." width="607" height="691" id="figure8" class="align-right">While high drug prices alone pose significant challenges for hospitals and health systems, it is compounded by the fact that many of these same drugs are in shortage. In fact, 2023 saw the most drug shortages in over a decade; there were an average of 301 drugs in shortage per quarter, an increase of 13.0% from the previous year (see <a href="#figure8">Figure 8</a>). These shortages added as much as 20% to hospital drug budgets, according to data from the American Society of Health System Pharmacists (ASHP). These shortages can occur for many reasons, including fractured global supply chains lack of available raw materials, and decisions by drug companies that lack incentives to produce low-margin generic medications.<a href="#fn26"><sup>26</sup></a> An ASHP survey found that more than 99% of hospital and health system pharmacists experienced drug shortages in 2023, with 85% of respondents describing the severity of drug shortages as critically or moderately impactful.<a href="#fn27"><sup>27</sup></a> While generic drugs comprised the majority of medications in shortage, estimated to make up as much as 83% of shortages, many of these drugs also were used to treat cancer and autoimmune diseases.<a href="#fn28"><sup>28</sup></a></p><p>Hospital pharmacy staff have limited options for navigating drug shortages. They can purchase the drug by going outside their traditional suppliers and group purchasing agreements, access alternate concentrations or package sizes of the drugs than what is needed or purchase a substitute drug with the same clinical indication. However, all three of these options mean hospitals pay higher prices to acquire the drugs. An ASPE report found up to a 16.6% increase in the prices of drugs in shortage; in many cases, the increase in the price of substitute drugs were at least three times higher than the price increase of the drug in shortage.<a href="#fn29"><sup>29</sup></a> The costs incurred as a result of drug shortages are compounded by staff overtime needed to find, procure and administer alternative drugs, to manage the added challenges of multiple medication dispensing automation systems and changing electronic health records (EHRs), and to undergo training to ensure medication safety using alternative therapies.<a href="#fn30"><sup>30</sup></a></p><h2><span>4. Hospital Supply Costs</span></h2><div class="row"><div class="col-md-5"><p>Having adequate and up-to-date medical supplies, devices and equipment are necessary for hospitals to deliver high quality care to patients. These can include artificial joints used to treat patients with conditions such as arthritis, robotic surgery machines used to perform laparoscopic surgical procedures, and complex imaging machinery used for clinical diagnostics. Most of these items are expensive to acquire and maintain and rely on increasingly volatile global supply chains. Comprising approximately 10.5% of the average hospital’s budget, medical supply expenses collectively accounted for $146.9 billion in 2023, an increase of $6.6 billion over 2022, according to data from Strata Decision Technology. As technology and science are constantly evolving, hospitals routinely need to purchase new supplies, devices and equipment that meet clinical care standards and ensure high quality care.</p><p>The upfront costs for critical equipment and device upgrades come at a significant cost (<a href="#table1">Table 1</a>). For example, the advanced technology of cardiac magnetic resonance imaging (cMRI) machines, which have allowed doctors to develop a deeper understanding of cardiac pathologies and has led to improved diagnostics, costs hospitals on average $3.2 million. For some hospitals that have high demand for cardiac services, they may need to purchase multiple cMRI machines. The additional costs for ongoing maintenance, upgrades and staff training also add to the total costs hospitals must incur to deliver their patients with the high quality care.</p></div><div class="col-md-7"> table, th, td { border: 1px solid; } th { background-color: #69b3e733; } } <table id="table1"><tbody><tr><td><h3>Table 1. Medical Device and Equipment Market Prices</h3></td></tr><tr><td><em>Cutting-edge innovation and technologies provide hospitals with the means to enhance patient outcome in their continuous commitment to delivering top-tier patient care. The featured equipment is intricately connected to advancements in diagnostics, heightened success rates in cardiovascular surgery, and more effective joint replacement procedures.</em></td></tr></tbody></table><table><thead><tr><th>Medical Devices and Equipment</th><th>Average List Price</th></tr></thead><tbody><tr><td colspan="2"><strong>Point of Care ultrasound devices</strong></td></tr><tr><td>Pocket-sized handheld or tablet-based</td><td>$8,143</td></tr><tr><td>Compact ultrasound systems*</td><td>$73,797</td></tr><tr><td colspan="2"><strong>Cardiovascular diagnostic and surgical equipment</strong></td></tr><tr><td>Cardiac magnetic resonance imaging (cMRI) machine</td><td>$3,230,728</td></tr><tr><td>Cardiopulmonary bypass system</td><td>$325,442</td></tr><tr><td colspan="2"><strong>Joint implant proprietary software and equipment</strong></td></tr><tr><td>Image based planning software</td><td>$222,132</td></tr><tr><td>Navigation software system (guide surgeons in real-time)</td><td>$135,365</td></tr><tr><td colspan="2"><p>*Larger than handheld devices, but still portable. May have more advanced features.</p><p><span><strong>Note:</strong></span> Market prices of medical devices and equipment are courtesy of ECRI, an independent not-for-profit corporation that provides a wide range of services dealing with health care technology.</p></td></tr></tbody></table></div></div><h2><span>5. Hospital Labor Costs</span></h2><p>Hospitals’ labor costs increased by more than $42.5 billion between 2021 and 2023 to a total of $839 billion, accounting for nearly 60% of the average hospital’s expenses. Hospitals continue to turn to expensive contract labor to fill gaps and maintain access to care, spending approximately $51.1 billion on contracted staff in 2023.</p><p><img src="/sites/default/files/inline-images/Figure-9-Growth-in-Total-Hospital-Employee-Compensation-Far-Outpaces-Inflation.png" data-entity-uuid="5fa4709d-12e9-47f3-af06-07ac3b0937b6" data-entity-type="file" alt="Figure 9. Growth in Total Hospital Employee Compensation Far Outpaces Inflation. 2014 to 2023: Inflation 28.7%; Hospital Employee Compensation 45.0%. Note: BLS Annual average Employee Cost Index, 2014 to 2023 for hospitals and CPI-U, 2014 to 2023." width="522" height="592" id="figure9" class="align-right">Though expenditures on contract labor have moderated since pandemic highs, the spending remains elevated and has added to the financial challenges hospitals and health systems face. This is especially true for smaller, rural hospitals where the local workforce pool is smaller and it can be more difficult to recruit staff. Hospitals’ labor costs also can be very sensitive to sudden fluctuations in the demand and supply of labor. Growth in wages and benefits of hospital employees has vastly surpassed economy-wide inflation over the last decade (see <a href="#figure9">Figure 9</a>).</p><p>Yet, critical labor shortages persist, especially in the face of growing burnout among clinicians. Employee burnout hastened by the pandemic and further exacerbated by commercial insurer administrative burden and increase in violence against hospital employees, led to an unprecedented exodus of health care professionals in recent years.<a href="#fn31"><sup>31</sup></a> Resignations per month among health care workers grew 50% between 2020 and 2023, according to data from McKinsey.<a href="#fn32"><sup>32</sup></a> Additionally, hospitals have been forced to contend with record high turnover rates — fueling additional expenses for hospitals looking to recruit new workers.<a href="#fn33"><sup>33</sup></a></p><p>Consequently, hospitals and health systems have invested more to attract and retain talent. Data from Lightcast indicates that advertised wage rates across all hospital jobs jumped by 10.1% during 2023. With a growing gap between supply and demand for health care workers over the next decade, labor costs will likely continue to be an issue for hospitals.</p><h2><span>A Look Ahead to the Rest of 2024</span></h2><p>Though 2024 is the first full year out of the most recent public health emergency period, hospitals and health systems continue to face many challenges. Credit ratings agencies have painted a bleak picture for the hospital sector in 2024.<a href="#fn34"><sup>34</sup></a> According to the S&P, negative outlooks for not-for-profit hospitals are proportionally at their highest in over a decade, affecting 24% of the sector.<a href="#fn35"><sup>35</sup></a> Similarly, Fitch reported a credit downgrade-to-upgrade ratio of 3:1 — alarmingly close to the ratio seen during the 2008 financial crisis — calling it a “make or break” year and highlighting the sector’s struggles, particularly among smaller hospitals with annual revenues under $500 million.<a href="#fn36"><sup>36</sup></a> While it is expected that hospitals and health systems will continue to face cost increases for labor, drugs, and medical supplies, there are additional headwinds to consider which include:</p><ul><li>Coverage losses due to Medicaid redeterminations: More than 19 million Medicaid enrollees have been disenrolled through 2023.<a href="#fn37"><sup>37</sup></a> Though partially offset by record Marketplace enrollment and possible enrollment in employer-sponsored coverage, this has still resulted in a steady increase in uncompensated care costs throughout 2023 and will likely continue into 2024 – particularly for states that have not expanded Medicaid.<a href="#fn38"><sup>38</sup></a></li><li>Potential legislative actions to cut hospital Medicare payments for patient care: Congress is considering several bills that would impose additional payment reductions to services provided in hospital outpatient departments. These proposals, referred to as “siteneutral” payment cuts, would exacerbate financial challenges for hospitals and threaten patients’ access to quality care.</li><li>Cybersecurity risks impact providers and patient care: The cyberattack on Change Healthcare in February 2024 has underscored the extensive repercussions such incidents can have on patient care and hospital operations. The disruptions stemming from that cyberattack have significantly hindered revenue cycle management, pharmacy services, select health care technologies, clinical authorizations, and more across multiple health systems, serving as an example of how an attack can reverberate across the entire health care sector when a business that provides numerous mission-critical services is compromised.<a href="#fn39"><sup>39</sup></a></li><li>Ongoing and escalating hospital violence: There has been a significant uptick in violence against health care workers in recent years.<a href="#fn40"><sup>40</sup></a> To address this issue, hospitals are making significant investments in violence prevention and preparedness efforts to support their employees.</li></ul><h2><span>Conclusion</span></h2><p>America’s hospitals and health systems are dedicated to providing high-quality 24/7 care to all patients in every community across the country. While the commitment to caring and advancing health never wavers, hospitals continue to face significant challenges making it difficult to ensure the care is always there.</p><p>The AHA continues to urge Congress and the Administration to support policies to make sure hospitals and health systems have the resources they need to continue providing 24/7 care to all patients and communities. These include:</p><ul><li>Rejecting Medicare and Medicaid cuts to hospital care, including harmful site-neutral proposals and forthcoming reductions to Medicaid Disproportionate Share hospitals.</li><li>Supporting and strengthening the health care workforce.</li><li>Protecting the 340B Drug Pricing Program from any harmful changes and reining in the increasing costs of drugs.</li><li>Taking actions to hold commercial insurers accountable for practices that delay, deny and disrupt care.</li><li>Bolstering support to enhance cybersecurity of hospitals and the entire health care system.</li></ul><hr><h2>End Notes</h2><ol><li id="fn1"><a href="www.kaufmanhall.com/news/2022-worst-financial-year-hospitals-and-health-systems-start-pandemic" target="_blank">www.kaufmanhall.com/news/2022-worst-financial-year-hospitals-and-health-systems-start-pandemic</a></li><li id="fn2"><a href="https://www.syntellis.com/sites/default/files/2023-11/aha_q2_2023_v2.pdf" target="_blank">www.syntellis.com/sites/default/files/2023-11/aha_q2_2023_v2.pdf</a></li><li id="fn3"><a href="https://fortune.com/well/2024/01/11/rural-hospitals-are-caught-in-an-aging-infrastructure-conundrum/" target="_blank">fortune.com/well/2024/01/11/rural-hospitals-are-caught-in-an-aging-infrastructure-conundrum/</a></li><li id="fn4"><a href="/guidesreports/2023-04-19-essential-role-financial-reserves-not-profit-healthcare" target="_blank">www.aha.org/guidesreports/2023-04-19-essential-role-financial-reserves-not-profit-healthcare</a></li><li id="fn5"><a href="https://www.modernhealthcare.com/finance/hospital-2023-credit-rating-downgrade-fitch-ratings-sp-global-moodys" target="_blank">www.modernhealthcare.com/finance/hospital-2023-credit-rating-downgrade-fitch-ratings-sp-global-moodys</a></li><li id="fn6"><a href="/cybersecurity/change-healthcare-cyberattack-updates" target="_blank">www.aha.org/cybersecurity/change-healthcare-cyberattack-updates</a></li><li id="fn7"><a href="/news/blog/2023-09-20-unwise-dsh-cuts-combined-rise-uncompensated-care-due-medicaid-redeterminations-coverage-losses-further" target="_blank">www.aha.org/news/blog/2023-09-20-unwise-dsh-cuts-combined-rise-uncompensated-care-due-medicaid-redeterminations-coverage-losses-further</a></li><li id="fn8">AHA analysis of 2022 Annual Survey data.</li><li id="fn9"><a href="https://www.trillianthealth.com/insights/the-compass/the-total-available-market-of-commercially-insured-patients-is-shrinking" target="_blank">www.trillianthealth.com/insights/the-compass/the-total-available-market-of-commercially-insured-patients-is-shrinking</a></li><li id="fn10"><a href="/news/headline/2024-01-10-aha-infographic-medicare-underpayments-hospitals-nearly-100-billion-2022#:~:text=AHA%20infographic%3A%20Medicare%20underpayments%20to%20hospitals%20nearly%20%24100%20billion%20in%202022,-Jan%2010%2C%202024&text=Medicare%20paid%20hospitals%20a%20record,negative%20Medicare%20margins%20that%20year." target="_blank">www.aha.org/news/headline/2024-01-10-aha-infographic-medicare-underpayments-hospitals-nearly-100-billion-2022#:~:text=AHA%20infographic% 3A%20Medicare%20underpayments%20to%20hospitals%20nearly%20%24100%20billion%20in%202022,-Jan%2010%2C%202024&text=Medicare%20 paid%20hospitals%20a%20record,negative%20Medicare%20margins%20that%20year.</a></li><li id="fn11"><a href="https://www.wsj.com/health/healthcare/health-insurance-cost-increase-5b35ead7" target="_blank">www.wsj.com/health/healthcare/health-insurance-cost-increase-5b35ead7</a></li><li id="fn12"><a href="https://www.mckinsey.com/~/media/mckinsey/industries/healthcare%20systems%20and%20services/our%20insights/administrative%20simplification%20how%20to%20save%20a%20quarter%20trillion%20dollars%20in%20us%20healthcare/administrative-simplification-how-to-save-a-quarter-trillion-dollars-in-us-healthcare.pdf?shouldIndex=false" target="_blank">www.mckinsey.com/~/media/mckinsey/industries/healthcare%20systems%20and%20services/our%20insights/administrative%20simplification%20 how%20to%20save%20a%20quarter%20trillion%20dollars%20in%20us%20healthcare/administrative-simplification-how-to-save-a-quarter-trillion-dollars- in-us-healthcare.pdf?shouldIndex=false</a></li><li id="fn13"><a href="https://premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimate-medical-claims" target="_blank">premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimate-medical-claims</a></li><li id="fn14"><a href="https://www.syntellis.com/sites/default/files/2023-11/aha_q2_2023_v2.pdf">www.syntellis.com/sites/default/files/2023-11/aha_q2_2023_v2.pdf</a></li><li id="fn15"><a href="https://oig.hhs.gov/oei/reports/OEI-09-19-00350.pdf" target="_blank">oig.hhs.gov/oei/reports/OEI-09-19-00350.pdf</a></li><li id="fn16"><a href="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf" target="_blank">oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf</a></li><li id="fn17"><a href="https://www.ensemblehp.com/blog/the-real-cost-of-medicare-advantage-plan-success/" target="_blank">www.ensemblehp.com/blog/the-real-cost-of-medicare-advantage-plan-success/</a></li><li id="fn18"><a href="https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf#page=401" target="_blank">www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf#page=401</a></li><li id="fn19"><a href="https://www.ama-assn.org/practice-management/prior-authorization/health-systems-plagued-payer-takeback-schemes-110000#:~:- text=authorization’s financial impact-,Prior authorization’s financial impact,an increase of 67%.”" target="_blank">www.ama-assn.org/practice-management/prior-authorization/health-systems-plagued-payer-takeback-schemes-110000#:~:- text=authorization’s%20 financial%20impact-,Prior%20authorization’s%20financial%20impact,an%20increase%20of%2067%25.%E2%80%9D</a></li><li id="fn20">AHA analysis of NHE projections of 2022-2031 expenditures.</li><li id="fn21"><a href="https://www.healthcaredive.com/news/healthcare-ransomware-costs-comparitech-77-billion/698044/" target="_blank">www.healthcaredive.com/news/healthcare-ransomware-costs-comparitech-77-billion/698044/</a></li><li id="fn22"><a href="https://intraprisehealth.com/the-cost-of-cyberattacks-in-healthcare/" target="_blank">intraprisehealth.com/the-cost-of-cyberattacks-in-healthcare/</a></li><li id="fn23"><a href="https://www.healthcareitnews.com/news/cisos-face-budgetary-pressures-burnout-during-global-recession" target="_blank">www.healthcareitnews.com/news/cisos-face-budgetary-pressures-burnout-during-global-recession</a></li><li id="fn24"><a href="https://www.reuters.com/business/healthcare-pharmaceuticals/prices-new-us-drugs-rose-35-2023-more-than-previous-year-2024-02- 23/?utm_source=facebook&utm_medium=news_tab" target="_blank">www.reuters.com/business/healthcare-pharmaceuticals/prices-new-us-drugs-rose-35-2023-more-than-previous-year-2024-02- 23/?utm_source=facebook& utm_medium=news_tab</a></li><li id="fn25"><a href="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs" target="_blank">aspe.hhs.gov/reports/changes-list-prices-prescription-drugs</a></li><li id="fn26"><a href="https://www.fda.gov/media/131130/download?attachment" target="_blank">www.fda.gov/media/131130/download?attachment</a></li><li id="fn27"><a href="https://news.ashp.org/-/media/assets/drug-shortages/docs/ASHP-2023-Drug-Shortages-Survey-Report.pdf" target="_blank">news.ashp.org/-/media/assets/drug-shortages/docs/ASHP-2023-Drug-Shortages-Survey-Report.pdf</a></li><li id="fn28"><a href="https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us-2023?utm_campaign=2023_ Drug_Shortages_Report_INSTITUTE_IS&utm_medium=email&utm_source=Eloqua" target="_blank">www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us-2023?utm_campaign=2023_ Drug_Shortages_Report_ INSTITUTE_IS&utm_medium=email&utm_source=Eloqua</a></li><li id="fn29"><a href="https://aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs" target="_blank">aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs</a></li><li id="fn30"><a href="https://link.springer.com/article/10.1007/s13181-023-00950-6#:~:text=Shortages%20compromise%20or%20delay%20medical,morbidity%20%5B1%2C%202%5D." target="_blank">link.springer.com/article/10.1007/s13181-023-00950-6#:~:text=Shortages%20compromise%20or%20delay%20medical,morbidity%20%5B1%2C%202%5D.</a></li><li id="fn31"><a href="/system/files/media/file/2023/06/fact-sheet-examining-the-real-factors-driving-physician-practice-acquisition.pdf" target="_blank">www.aha.org/system/files/media/file/2023/06/fact-sheet-examining-the-real-factors-driving-physician-practice-acquisition.pdf</a></li><li id="fn32"><a href="https://www.mckinsey.com/industries/healthcare/our-insights/how-health-systems-and-educators-can-work-to-close-the-talent-gap" target="_blank">www.mckinsey.com/industries/healthcare/our-insights/how-health-systems-and-educators-can-work-to-close-the-talent-gap</a></li><li id="fn33"><a href="https://www.healthcarefinancenews.com/news/rn-turnover-healthcare-rise" target="_blank">www.healthcarefinancenews.com/news/rn-turnover-healthcare-rise</a></li><li id="fn34"><a href="https://on24static.akamaized.net/event/44/67/84/2/rt/1/documents/resourceList1709062595167/ushealthcaresectorcreditbeat227241709062595167.pdf" target="_blank">on24static.akamaized.net/event/44/67/84/2/rt/1/documents/resourceList1709062595167/ushealthcaresectorcreditbeat227241709062595167.pdf</a></li><li id="fn35"><a href="https://www.spglobal.com/ratings/en/research/articles/231206-historical-peak-of-negative-outlooks-signals-challenges-remain-for-u-s-not- for-profit-acute-health-care-provi-12927513" target="_blank">www.spglobal.com/ratings/en/research/articles/231206-historical-peak-of-negative-outlooks-signals-challenges-remain-for-u-s-not- for-profit-acutehealth- care-provi-12927513</a></li><li id="fn36"><a href="https://www.fitchratings.com/research/us-public-finance/us-not-for-profit-hospitals-health-systems-outlook-2024-05-12-2023" target="_blank">www.fitchratings.com/research/us-public-finance/us-not-for-profit-hospitals-health-systems-outlook-2024-05-12-2023</a></li><li id="fn37"><a href="https://www.kff.org/report-section/medicaid-enrollment-and-unwinding-tracker-overview/" target="_blank">ww.kff.org/report-section/medicaid-enrollment-and-unwinding-tracker-overview/</a></li><li id="fn38"><a href="/news/blog/2023-09-20-unwise-dsh-cuts-combined-rise-uncompensated-care-due-medicaid-redeterminations-coverage-losses-further" target="_blank">www.aha.org/news/blog/2023-09-20-unwise-dsh-cuts-combined-rise-uncompensated-care-due-medicaid-redeterminations-coverage-losses-further</a></li><li id="fn39"><a href="/2024-02-24-update-unitedhealth-groups-change-healthcares-continued-cyberattack-impacting-health-care-providers" target="_blank">www.aha.org/2024-02-24-update-unitedhealth-groups-change-healthcares-continued-cyberattack-impacting-health-care-providers</a></li><li id="fn40"><a href="https://apnews.com/article/hospitals-workplace-violence-shootings-aa6918569ff8f76ff8a15b9813e31686" target="_blank">apnews.com/article/hospitals-workplace-violence-shootings-aa6918569ff8f76ff8a15b9813e31686</a></li></ol></div><div class="col-md-4"><p><a 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Banner_Title_Overlay_Bar */ .Banner_Title_Overlay_Bar { position: relative; display: block; overflow: hidden; max-width: 1170px; margin: 0px auto 25px auto; } .Banner_Title_Overlay_Bar h1 { position: absolute; bottom: 40px; color: #003087; background-color: rgba(255, 255, 255, .8); width: 100%; padding: 20px 40px; font-size: 3em; box-shadow: 0 3px 8px -5px rgba(0, 0, 0, .6); } @media (max-width:991px) { .Banner_Title_Overlay_Bar h1 { bottom: 0px; margin: 0px; font-size: 2.5em; } } @media (max-width:767px) { .Banner_Title_Overlay_Bar h1 { font-size: 2em; text-align: center; text-indent: 0px; padding: 10px 20px; } } @media (max-width:530px) { .Banner_Title_Overlay_Bar h1 { position: relative; background-color: #63666A22; } } /* Banner_Title_Overlay_Bar // */ <header class="Banner_Title_Overlay_Bar"><img src="/sites/default/files/2025-04/2025-community-benefit-report-header-image-sample.jpg" alt="Banner Image" width="1206" height="302"><div><h1>Addressing Each Community's Unique Needs</h1></div></header></div></div><div class="container"><div class="row"><div class="col-md-9"><div> </div><p><img src="/sites/default/files/inline-images/image_48.png" data-entity-uuid="9318d7c5-78b7-44d5-91f3-4cd87e680219" data-entity-type="file" alt="Blue Nonprofit Hospital Community Benefits: Header Image" width="511" height="110" hspace="10px" vspace="10px" class="align-left"><br><br>While all hospitals provide critical services and play a vital role in serving their communities, this report specifically examines the benefits reported to the IRS by Form 990 Schedule H provided to communities by nonprofit hospitals and systems. Nonprofit hospitals make up the majority of the U.S.’s community hospitals and account for nearly three-quarters of all community hospital admissions. They play a critical role in providing essential care and services tailored to the unique needs of their communities. Beyond offering 24/7 emergency, acute, and chronic care, they support initiatives to make communities healthier and invest in research, medical innovation, and workforce development. These benefits provide invaluable support to communities across the country, and it is critical to take a comprehensive view of their provision and impact.</p><p>To qualify for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, nonprofit hospitals must demonstrate that they provide broad community benefits and serve the public interest. Hospitals report these benefits to the IRS through Form 990 Schedule H, which groups them into several different categories. This <a href="/system/files/media/file/2025/04/nonprofit-hospital-community-benefits-addressing-each-communities-unique-needs-report.pdf" target="_blank">report</a> focuses on eight key areas of benefits reported under Part I of Schedule H to highlight the dynamic relationship between nonprofit hospitals’ provision of benefits and the evolving needs of their communities. <br> </p><p><img src="/sites/default/files/inline-images/image_50.png" data-entity-uuid="71221ac3-5c4e-483b-8d52-52a814831e01" data-entity-type="file" alt="Key Findings Header Image" width="176" height="50"><img src="/sites/default/files/inline-images/image_56.png" data-entity-uuid="8af60437-0239-4a0d-9cf3-3840a5672da8" data-entity-type="file" alt="Figure 1 Distribution of Benefits Reported under Schedule H Part 1, Tax Years 2011 vs. 2021" width="437" height="488" hspace="10px" vspace="10px" class="align-right"></p><ul><li><span><strong>Nonprofit hospitals provide numerous community benefits in addition to financial assistance. These benefits are tailored to meet the evolving needs of their communities</strong></span>. Hospital resources are finite, and therefore, their allocation varies based on community needs, which are influenced by factors such as demographics and economic conditions. Additionally, regulatory changes may lead to shifts in spending across these categories over time (Figure 1). It is imperative that policymakers, researchers and the public take a holistic view of how nonprofit hospitals serve their communities. </li><li><span><strong>Community benefits vary by hospital characteristics.</strong></span> Community benefits vary based on the type of patients the hospital serves (e.g., children), core functions (e.g., teaching or research), status as a sole provider in rural or underserved areas, and size.</li><li><p><span><strong>Providing care at a loss to low-income patients covered through Medicaid and those in need of financial assistance are important and related components of community benefit</strong></span>. Shifts in federal and state policy can significantly impact the distribution of community benefits from year to year. For example, Medicaid expansion resulted in an increase in Medicaid shortfall, as more low-income individuals gained coverage under Medicaid. At the same time, the need for financial assistance for uninsured individuals declined as more individuals gained coverage. As a result, hospitals experienced an associated increase in Medicaid shortfall (given the larger number of Medicaid beneficiaries) and a decrease in financial assistance (given the smaller number of uninsured individuals). These and other policy changes, while not intended to impact hospitals’ provision of community benefits, will influence how benefits are delivered in relation to each other.</p><hr></li></ul><p><img src="/sites/default/files/inline-images/image_57.png" data-entity-uuid="d66dbc59-910c-4c1f-9bd9-c97dabb14ea9" data-entity-type="file" alt="Image header reading Nonprofit Hospital Community Benefits: Addressing Each Community's Unique Needs." width="500" height="185" class="align-left"></p><figure><p> </p><p> </p><p><br> </p><p> </p><p><br> </p><img src="/sites/default/files/inline-images/image_63.png" data-entity-uuid="989524a1-e805-44a4-ac98-ee7155a124af" data-entity-type="file" alt="Image of Introduction Header" width="174" height="56" class="align-left"><p>Non-governmental, nonprofit hospitals make up the majority of the U.S.’s 5,129 community hospitals and account for nearly three-quarters of all community hospital admissions.1 Nonprofit hospitals and health systems, in addition to providing critical emergent, acute, and chronic care, give back to their communities in multiple ways to meet the unique needs of the people they serve.</p><p>Nonprofit hospitals ensure access to health care for low-income individuals and families by absorbing below-cost reimbursement from means-tested government programs and providing health care to those who might otherwise struggle to access care. They promote healthier communities by helping patients navigate and find support for a variety of health and community needs. This includes providing health screenings, transportation to medical appointments, education and other community health programs like vaccination clinics, and addressing many other needs that affect their communities’ health and well-being. Additionally, many nonprofit hospitals invest in lifesaving research and medical innovation, train the future medical workforce, and subsidize vital health services, such as burn, behavioral health and neonatal units, which are essential resources provide 24/7 365 days a year for communities nationwide. Critically, these efforts are tailored to meet the evolving, specific needs of their communities, allowing hospitals to provide targeted, high-quality care and address broader health issues in a way that most directly benefits their local populations.</p><p>Recent discussions of non-profit hospitals and their tax-exempt status have focused on concerns regarding specific measures of benefits while ignoring others in a way that misrepresents the extent of the community benefits provided. <strong>Every community is different, and the benefits and services nonprofit hospitals provide are similarly unique and tailored to those community needs. It is imperative that policymakers, researchers and the public take a comprehensive view of the numerous ways nonprofit hospitals serve their communities.</strong></p><hr><p><img src="/sites/default/files/inline-images/image_66.png" data-entity-uuid="87ceef0b-be54-448b-a451-aa68a2f03bad" data-entity-type="file" alt="Blue Background Header Image" width="335" height="147" hspace="10px" vspace="10px" class="align-left"><br><br>To qualify as federal tax-exempt entities under Section 501(c)(3) of the Internal Revenue Code, nonprofit hospitals and health systems must “demonstrate that they provide benefits to a class of persons that is broad enough to benefit the community and operate to serve a public rather than a private interest.” The U.S. Internal Revenue Service (IRS) sets out a series of factors, known as the “Community Benefit Standard,” to demonstrate community benefit.<sup>2</sup> </p><p>Nonprofit hospitals are further required by law to report on these benefits to the IRS through Form 990 Schedule H (hereinafter Schedule H). Though the Schedule H requires reporting on a broad set of activities and expenses, this analysis focuses only on the eight categories of benefits reported in Part I: Financial Assistance and Certain Other Community Benefits at Cost (Table 1). The purpose of this analysis is to show how these categories relate to each other and why they may differ from hospital to hospital or community to community.<br> </p><p><small><strong>Table 1. IRS Form 990 Schedule H Reporting Categories<sup>3</sup></strong></small> </p><table border="1px" cellspacing="0" cellpadding="0" width="735"><tbody><tr><td width="182"><span><strong>Schedule H Section</strong></span></td><td width="146"><span><strong>Schedule H Category</strong></span></td><td width="408"><span><strong>Definition</strong></span></td></tr><tr><td rowspan="8" width="182">Part I: Financial<br>Assistance and Certain<br>Other Community<br>Benefits at Cost</td><td width="146">Financial assistance*</td><td width="408">Free or discounted health services provided to persons who cannot afford to pay all or portions of their medical care and who meet the organization's financial assistance policy criteria.</td></tr><tr><td width="146">Medicaid shortfall</td><td width="408">The difference between the cost of care provided under Medicaid and the revenue derived therefrom.</td></tr><tr><td width="146">Other means tested government programs</td><td width="408">The difference between the cost of care provided under non-Medicaid means-tested government programs and the revenue derived therefrom.</td></tr><tr><td width="146">Community health improvement services</td><td width="408">Activities and programs for the express purpose of improving community health. Such activities focus on health promotion, wellness, prevention, and address social needs.</td></tr><tr><td width="146">Health professions education</td><td width="408">Educational programs that result in a degree, a certificate or training necessary to be licensed to practice as a health professional, as required by state law, or continuing education necessary to retain state license or certification by a board in the individual's health profession specialty.</td></tr><tr><td width="146">Subsidized health services</td><td width="408">Clinical services provided despite a financial loss to the organization.</td></tr><tr><td width="146">Research</td><td width="408">Any study or investigation the goal of which is to generate increased generalizable knowledge made available to the public.</td></tr><tr><td width="146">Cash and in-kind contributions to community groups</td><td width="408">Contributions made by the organization to health care organizations and other community groups restricted, in writing, to one or more community benefit activities.</td></tr><tr><td colspan="3" width="735">*Also known as charity care.</td></tr></tbody></table><p><br>While hospitals exist to serve their communities, continued government underpayment results in finite resources. As such, hospitals must make decisions on how to use these finite resources to meet the evolving needs of their local communities. Those needs vary depending on factors such as geography, demographics, payer mix and economic conditions. The spending associated with different Schedule H Part I categories has shifted over time, reflecting both the changing nature of community needs and the impact of legislative and regulatory changes</p><p><img src="/sites/default/files/inline-images/image_68.png" data-entity-uuid="4486f391-5c45-4caa-9a0c-2609e5686059" data-entity-type="file" alt="Image of Figure 1 table: Figure 1. Distribution of Benefits Reported Under Schedule H Part I, Tax Years 2011 vs. 2021" width="437" height="517" hspace="10px" vspace="10px" class="align-left">For example, the significant growth in Medicaid enrollment over the last decade has meant that more of hospitals’ community benefit resources are needed to offset the losses resulting from well documented underpayments by state Medicaid programs. From 2011 to 2021, Medicaid shortfall increased as a share of Schedule H Part I benefits by 39%. This increase was fueled by a substantial rise in the number of people covered by Medicaid following both the implementation of Medicaid expansion in 40 states and in D.C. At the same time, the share of hospital financial assistance decreased by 37% from 2011 to 2021 as the uninsured population in the U.S. declined. This decrease in the number of uninsured was driven by the Medicaid expansion, as well as the other coverage initiatives. The impact of Medicaid expansion on Schedule H Part I benefits is examined further in the Policy & Regulatory Changes and Schedule H Part I Benefits section. </p><p>This report highlights the dynamic relationship between the benefits nonprofit hospitals provide and their community needs, with a focus on benefits reported under Part I of the Schedule H. It is important to look at the totality of benefits that nonprofit hospitals provide to understand the unique value they provide to the communities they serve.<br> </p><p><img src="/sites/default/files/inline-images/image_69.png" data-entity-uuid="cd807fed-1e18-44ab-a8d0-0999a45bdc45" data-entity-type="file" alt="Header Image that reads Nonprofit Hospital Characteristics and Schedule H Part 8 Benefits" width="510" height="110" hspace="10px" vspace="10px" class="align-left"><br><br>Hospitals, just like the communities they serve, are not monolithic. There is considerable variation in their characteristics, including the types of patients they treat, the services they offer, and their size and scope. When examining the benefits that nonprofit hospitals provide their communities, it is important to account for these differences. The examples below highlight the ways in which different communities rely on the unique benefits and services their hospitals provide, even though those benefits and services may be different from community to community. </p><p>Nonprofit hospitals come in many different forms, including children’s hospitals, academic medical centers and critical access hospitals (CAHs). As illustrated in Figure 2, nonprofit community hospitals provide a higher share of financial assistance as a percentage of community benefit spending as compared to these other specific types of nonprofit hospitals. On the other hand, while children’s hospitals provide the lowest amount of financial assistance across hospital types, they incur the highest amount of Medicaid shortfall as a percentage of community benefit. This is because children are disproportionately covered by Medicaid and the Children’s Health Insurance Program (CHIP), covering 38 million children nationwide, and thus are less likely to be uninsured.4 Children’s hospitals also allocate the highest levels of benefit dollars to research, reflecting the complex and unique medical needs of the population they serve. </p><p>Teaching hospitals, with their distinct role in educating and training future medical professionals, allocate the largest share of community benefit spending to health professions education. Teaching hospitals tend to be located in large metropolitan areas and often serve a disproportionately high number of Medicaid patients, providing a significant amount of care to low-income populations.5 This means that teaching hospitals cover a greater degree of the Medicaid shortfall and, consequently, see lower levels of charity care as a percentage of community benefit spending. Teaching hospitals, which often include advanced medical research centers, also allocate one of the highest shares of benefit dollars to research.<br> </p><figure><img src="/sites/default/files/inline-images/image_70.png" data-entity-uuid="c2f3e83c-30d3-4ecc-9ac7-263ee0c59695" data-entity-type="file" alt="Image of Figure 2. Distribution of Benefits Reported Under Part 1 of Schedule H by Hospital Types, Tax Year 2021" width="846" height="523"></figure><p> </p><p>The unique position of CAHs further illustrates the importance of evaluating the full picture of community benefits and, conversely, the risk of undermining those benefits with an unduly narrow perspective. To qualify as a CAH, a hospital must be located more than 35 miles from another hospital, must have 25 or fewer acute inpatient care beds, and generally must restrict patient length of stay to no more than 96 hours<sup>.6</sup> These facilities are widely recognized as essential for maintaining high-quality health care access across nearly 1,400 rural areas. CAHs are often the only access point for essential health care services in their communities but low population volume makes it a challenge to finance core services that must be available in a community, generating a significantly higher share of health services expenses subsidized by hospitals at a financial loss, including clinical services like burn and wound care, behavioral health, and pulmonology<sup>.7</sup> The critical importance of CAHs’ very presence in their communities is undeniable; the benefit they provide to their communities is self-evident. Yet, they have lower shares of financial assistance and Medicaid shortfall, given the need for them to instead use their limited resources to subsidize a greater number of core services.</p><p>Benefits also vary by hospital size, as measured by hospital expenses (Figure 3). Medium-sized hospitals provide the highest share of Medicaid shortfall (46.9%) and financial assistance (21.1%) as a percentage of community benefit spend, whereas large hospitals, which include major academic medical centers, allocate the largest share of their community benefit spend on health professions education (19.3%) and research (5.4%). Conversely, small hospitals see a significantly larger shortfall from subsidized health services as a percentage of community benefit expenses (27.8%).</p><p> </p><figure><img src="/sites/default/files/inline-images/community-benefit-report-figure3.png" data-entity-uuid="b137a528-d620-47d9-bde0-0168a82f8a9a" data-entity-type="file" alt="Image of figure 3: Distribution of Benefits Reported Under Part 1 of Schedule H by Hospital Size, Tax Year 2021" width="1004" height="753" class="align-center"></figure><hr><p><img src="/sites/default/files/inline-images/image_74.png" data-entity-uuid="a5328c0d-1e42-4d39-873e-56a247bfd275" data-entity-type="file" alt="Image of the Header that reads Policy & Regulatory hanges and Schedule H Part 1 Benefits" width="511" height="128" hspace="10px" vspace="10px" class="align-left"></p><p> </p><p>In addition to hospital characteristics, policy and regulatory environments can significantly impact how hospitals allocate Schedule H Part I benefits year to year. Changes to coverage policies and reporting requirements, for example, can cause sizable shifts in the distribution of benefits. As such, a singular focus on a particular benefit category — such as financial assistance — can generate a false narrative of the benefits hospitals provide their communities.</p><p> </p><figure><p><img src="/sites/default/files/inline-images/image_75.png" data-entity-uuid="e0d9a14f-8fef-4a08-ba15-7c7f9481a195" data-entity-type="file" alt="Image Header Medicaid Expansion" width="268" height="50"></p></figure><p>The intent of Medicaid expansion was to increase access to insurance for low-income individuals across the country. Indeed, that was the result of the program, providing Medicaid coverage to individuals who were previously uninsured. As a result, hospitals saw uncompensated care levels decrease as patients who may have previously qualified for the hospital’s financial assistance policies were now receiving coverage through Medicaid and other coverage expansions, including subsidized coverage in the Marketplaces. Unsurprisingly, hospitals then generally experienced increases in their coverage of the Medicaid shortfall and decreases in financial assistance expenses.<sup>8</sup></p><p>This trend is evidenced by data from hospitals located in states that have expanded Medicaid. After Medicaid expansion took effect, these states saw a 34% increase in Medicaid enrollment, covering 13 million new Medicaid beneficiaries.<sup>9</sup> As a result, hospitals in Medicaid expansion states experienced an increase in their Medicaid shortfall, with an associated decrease in financial assistance, as individuals who were previously uninsured and would have otherwise sought financial assistance were now enrolled in Medicaid. This rise in Medicaid coverage and reduction in financial assistance following Medicaid expansion was a widely expected trend among policymakers and researchers.<sup>10</sup> As shown in Figure 4, Medicaid shortfall expenses for hospitals located in expansion states were 2.4% of total expenses in the year before those states implemented expansion. Three years after expansion, Medicaid shortfall expenses increased to 3.2%. In contrast, hospitals located in the non-expansion states had Medicaid shortfall and financial assistance levels that remained approximately the same before and after 2014. </p><p> </p><p><a href="https://www.kff.org/status-of-state-medicaid-expansion-decisions/" target="_blank" title="State of Medicaid Expansion Decisions"><img src="/sites/default/files/inline-images/image_77.png" data-entity-uuid="72a93729-b1f1-4d9d-9c5b-db760e63163e" data-entity-type="file" alt="Image of Figure 4" width="1151" height="609" class="align-left"></a><br> </p></figure><p><img src="/sites/default/files/inline-images/image_78.png" data-entity-uuid="a138bff4-9ed0-4a3d-ac53-69a18565a15e" data-entity-type="file" alt="Image of Research Header" width="177" height="50"></p><p>Other policy changes have caused substantial shifts in the allocation of hospitals’ Part I benefits and further illustrate the complexity of Schedule H reporting. For example, significant shifts resulted from a 2014 regulatory change in how research expenses were accounted for and reported to the IRS. This change required hospitals to report restricted research grants and contributions that were used to provide benefit expenses as offsetting revenue, meaning that grants and contributions for research were subtracted from the total research expenses reported. This accounting shift resulted in a net reduction in the reported benefit expense for research.11 The data show that the share of research expenses (as a share of total Schedule H Part I benefits) decreased by 59% between 2013 and 2014, dropping from 11.1% to 4.6%. But in reality, the actual investment in research by nonprofit hospitals did not decrease; the decrease is attributable to this reporting change.</p><hr><p><img src="/sites/default/files/inline-images/image_82.png" data-entity-uuid="a21b7f79-179f-4304-b502-2b2af316f122" data-entity-type="file" alt="Discussion Image Header" width="328" height="153" hspace="10px" vspace="10px" class="align-left"></p><p><br><br>Nonprofit hospitals provide a broad array of benefits that vary depending on the unique needs of the communities they serve, as well as federal, state, and local laws and policies that may affect their operations. The data clearly show that it is essential to holistically examine community benefits in the context of the local community needs and policy landscape when assessing how nonprofit hospitals contribute to their communities. Nevertheless, some stakeholders have argued that the value of community benefit should be measured solely by the provision of financial assistance or some other limited combination of benefits. </p><p>Beyond what is reported on the IRS Form 990 Schedule H, nonprofit hospitals engage with their communities in a variety of meaningful ways that advance health and well-being. For example, hospitals partner with a range of local organizations to address community needs, such as housing and health screenings, as well as with local health departments in emergency preparedness and response efforts.</p><p><strong>It is important to take a comprehensive view of community benefits and the ways nonprofit hospitals are impacting the health of their communities</strong>. Nonprofit hospitals and health systems remain steadfastly committed to addressing the unique challenges of the communities they serve and effectively allocating their finite resources to improve the health of their communities.</p><hr><p><img src="/sites/default/files/inline-images/image_83.png" data-entity-uuid="1052e367-6d22-4a02-af1e-71714be59091" data-entity-type="file" alt="Image of Methods Header" width="287" height="153"><br> </p><p><img src="/sites/default/files/inline-images/image_84.png" data-entity-uuid="8829a366-9d9b-4154-be2c-fb35fff3ccba" data-entity-type="file" alt="Image of Community Benefit Calculation Header" width="335" height="47"></p><p>The community benefit expenses used for this report are those reported to the IRS net of any offsetting revenue. Net community benefit expenditures were summed across hospital employer identification numbers (EINs) and expressed as either a percentage of total Schedule H Part I benefits or a percentage of the total EIN expenses reported by the same hospitals. </p><p>To get total EIN expenses, hospital level expenses were taken from a RTI International analysis of the Community Benefit Insight (CBI), a publicly available database that aggregates U.S.-based nonprofit hospital community benefit spending data reported to the IRS, for years 2011 to 2021, and the AHA’s Annual Survey of Hospitals, for the equivalent tax year and summed up to the EIN level under which those hospitals reported.12 Numbers and Figures include all EINs unless otherwise specified. </p><p>For purposes of the IRS Form 990 Schedule H (Schedule H), the tax year is equivalent to the calendar year in which the reporting year begins (e.g., a fiscal year beginning Oct. 1, 2021, would report under tax year 2021, not under the fiscal year end of Sept. 30, 2022).<br> </p><p><img src="/sites/default/files/inline-images/image_85.png" data-entity-uuid="5eddd722-34ee-4c2f-b426-3bacc5913da6" data-entity-type="file" alt="Image of Individual and Group Schedule Hs" width="434" height="50"></p><p>Hospitals submit a Schedule H for a single hospital (individual Schedule) or as part of a combined Schedule that includes other hospitals (group Schedule), depending on their organizational structure. The 2020 file contains 2,288 Schedules. Upon review, AHA identified 2,790 total hospitals in the Schedule H data file and matched these records with the AHA Annual Survey database.</p><h2><span>Size</span></h2><p><strong>Definition: </strong>Categories based on total hospital expenses.</p><ul><li>“Small” is less than $100M.</li><li> “Medium” is $100M-$299M.</li><li>“Large” is $300M or more.</li></ul><p><span><small class="sm"><strong>Source:</strong></small></span><small class="sm"> AHA 2022 Annual Survey</small></p><h2><span>Critical Access Hospital</span></h2><p><strong>Definition: </strong>A critical access hospital (CAH) is a hospital designated as a CAH by a state that has established a State Medicare Rural Hospital Flexibility Program in accordance with Medicare rules. To qualify as a CAH, a hospital must be in a rural area, located more than 35 miles from another hospital, limited to a maximum of 25 acute inpatient care beds, and maintain an annual average patient length of stay of 96 hours or less for acute care. Further details about the criteria for the CAH designation can be found at CMS.gov.</p><p><span><small class="sm"><strong>Source:</strong></small></span><small class="sm"><strong> </strong>The national CAH database is maintained by a consortium of the Rural Health Research Centers at the Universities of Minnesota, North Carolina-Chapel Hill, and Southern Maine, and funded by the Federal Office of Rural Health Policy. The list contains the most current information and is updated regularly based on CMS reports, information provided by state Flex Coordinators, and data collected by the NC Rural Health Research Program on hospital closures.</small></p><h2><span>Nonprofit Community Hospital</span></h2><p><strong>Definition:</strong> Nonprofit community hospitals are defined as all nonprofit, nonfederal, short-term general, and other special hospitals. Other special hospitals include obstetrics and gynecology; eye, ear, nose, and throat; long-term acute care; rehabilitation; orthopedic; and other individually described specialty services. Nonprofit community hospitals include academic medical centers or other teaching hospitals if they are nonprofit, nonfederal, short term hospitals. Excluded are hospitals not accessible by the general public, such as prison hospitals or college infirmaries.</p><p><span><small class="sm"><strong>Source:</strong></small></span><small class="sm"> AHA Fast Facts on U.S. Hospitals, 2024</small></p><h2><span>Children’s Hospital</span></h2><p><strong>Definition: </strong>A children’s hospital is a center for the provision of health care to children and includes independent acute care children’s hospitals, children’s hospitals within larger medical centers, and independent children’s specialty and rehabilitation hospitals.</p><p><span><small class="sm"><strong>Source:</strong></small></span><small class="sm"><strong> </strong>AHA 2022 Annual Survey</small></p><h2><span>Teaching Hospital</span></h2><p><strong>Definition: </strong>A teaching hospital is a hospital that provides training to medical students, interns, residents, fellows, nurses, or other health professionals and providers, provided that such educational programs are accredited by the appropriate national accrediting body.</p><p><span><small class="sm"><strong>Source:</strong></small></span><small class="sm"><strong> </strong>AHA Membership Database. To be identified as a teaching hospital, the hospital site must meet at least one of the following criteria: be recognized for one or more Accreditation Council for Graduate Medical Education accredited programs; have a medical school affiliation reported to the American Medical Association; be a Council of Teaching Hospitals (COTH) member; have internships approved by the American Osteopathic Association (AOA); or have residencies approved by AOA.</small></p><h2><span>System Affiliation</span></h2><p><strong>Definition: </strong>A hospital is considered “affiliated” if it is owned, leased, or managed by a health care system. Unaffiliated hospitals are called “independent” or “stand-alone.”</p><p><span><small class="sm"><strong>Source:</strong></small></span><small class="sm"><strong> </strong>AHA Membership Database</small></p><h3><span><small class="sm">End Notes</small></span></h3><hr><ol><li>���������� Association (AHA), “AHA Hospital Statistics, 2023 Edition.”</li><li><a href="https://www.irs.gov/charities-non-profits/charitable-hospitals-general-requirements-for-tax-exemption-under-section-501c3">irs.gov/charities-non-profits/charitable-hospitals-general-requirements-for-tax-exemption-under-section-501c3 </a></li><li><a href="https://www.irs.gov/pub/irs-pdf/i990sh.pdf">irs.gov/pub/irs-pdf/i990sh.pdf</a></li><li><a href="https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaid-chip-application-eligibility-determination-and-enrollment-reports-data/index.html">medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaidchip-application-eligibility-determination-and-enrollment-reports-data/index.html</a></li><li><a href="/guidesreports/2022-10-21-exploring-metropolitan-anchor-hospitals-and-communities-they-serve" target="_blank">aha.org/guidesreports/2022-10-21-exploring-metropolitan-anchor-hospitals-and-communities-they-serve</a></li><li><a href="https://www.cms.gov/medicare/health-safety-standards/certification-compliance/critical-access-hospitals">cms.gov/medicare/health-safety-standards/certification-compliance/critical-access-hospitals </a></li><li><a href="/costsofcaring" target="_blank">aha.org/costsofcaring</a>          </li><li>Taitane Santos, Simone Singh, and Gary J. Young, “Medicaid Expansion and Not-For-Profit Hospitals’ Financial Status: National and State-Level Estimates Using IRS and CMS Data, 2011-2016,” Sage Journals Medical Care Research and Review 79 no. 3 (April 22, 2021): 448-457,</li><li>Medicaid and CHIP Payment and Access Commission (MACPAC), “Medicaid Enrollment Changes Following the ACA,” March 31, 2022, at <a href="https://www.macpac.gov/subtopic/medicaid-enrollment-changes-following-the-aca/" target="_blank">macpac.gov/subtopic/medicaid-enrollment-changes-following-the-aca/.</a> The 34% increase in Medicaid enrollment represents growth from 2013 to 2020.</li><li>See, for example, Susan Camilleri, “The ACA Medicaid Expansion, Disproportionate Share Hospitals, and Uncompensated Care,” Health Services Research 53 no. 3 (May 8, 2017): 1562-1580,  and David Dranove, Craig Garthwaite, and Christopher Ody, “Uncompensated Care Decreased At Hospitals In Medicaid Expansion States But Not At Hospitals In Nonexpansion States,” Health Affairs 35 no. 8 (August 1, 2016) 1471-1479.</li><li>Schedule H instructions were updated in 2013 and included the following direction: “‘Direct offsetting revenue’ also includes restricted grants or contributions that the organization uses to provide a community benefit, such as a restricted grant to provide financial assistance or fund research.” While this change had the largest impact on the research category, it could also impact other benefit categories if a hospital received grant funding for activities included under another Schedule H category (e.g., a grant related to community health improvement services). See <a href="https://www.irs.gov/pub/irs-prior/i990sh--2013.pdf" target="_blank">irs.gov/pub/irs-prior/i990sh--2013.pdf.</a></li><li>For more information on the Community Benefit Insight (CBI), see <a href="https://www.communitybenefitinsight.org/" target="_blank">communitybenefitinsight.org/</a>.<br> </li></ol><p> </p><p> </p><p> </p><p> </p></div><div class="col-md-3"><p> </p><div><p></p><div><div class="text-align-center external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/04/aha-cha-community-benefit-report-press-release-4-9-2025.pdf" target="_blank">Download Press Release PDF</a></div><a href="/system/files/media/file/2025/04/aha-cha-community-benefit-report-press-release-4-9-2025.pdf"><img src="/sites/default/files/inline-images/cover-aha-cha-community-benefit-report-press-release-4-9-2025.png" data-entity-uuid="54e38ca5-063e-4f34-8f35-8052f3d5de17" data-entity-type="file" alt="Image of Community Benefit Report Press Release" width="653" height="845"></a></div><p> </p><div class="text-align-center external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/04/community-benefit-report-social-media-content-toolkit.pdf" target="_blank">Download Toolkit PDF</a></div><img src="/sites/default/files/inline-images/cover-community-benefit-report-social-media-content-toolkit_0.png" data-entity-uuid="ac9be2b2-ca70-48db-ab2b-69e6ea1e252f" data-entity-type="file" alt="Cover Image of Community Benefit Toolkit" width="640" height="828"></div></div></div></div> Tue, 01 Apr 2025 15:52:32 -0500 Guides/Reports /guidesreports/2025-03-11-improvement-safety-culture-linked-better-patient-and-staff-outcomes <div class="container"> .container h2{ color:#003087; } <div class="row"><div class="col-md-4"><h3>Insights Report</h3><p>Every day, in every hospital across America, care teams work to provide safe, high-quality care to each and every patient. Part of that work includes continually identifying what drives better outcomes, and then implementing changes to improve patient care.</p><p>AHA’s insights report series features learnings gained in collaboration with data partners to better analyze hospital and health system progress on patient safety. In September 2024, AHA partnered with Vizient to release a <a href="/guidesreports/2024-09-12-new-analysis-shows-hospitals-performance-key-patient-safety-measures-surpassing-pre-pandemic-levels" title="View the report: New Analysis Shows Hospitals Improving Performance on Key Patient Safety Measures Surpassing Pre-pandemic Levels">report</a> showing that numerous outcome measures of health care quality and patient safety — including mortality and healthcare-associated infections — are improving while hospitals care for more patients with significant health care needs.</p><p>The latest insights report, created in collaboration with Press Ganey, highlights progress on additional outcome measures of patient safety including some that reflect the ongoing work nurses lead to protect patients. In addition, Press Ganey’s comprehensive data shows clear improvement on the experience of both patients and the health care workforce. It also shows improvements in safety culture, which is a leading indicator of better safety outcomes and better experiences for patients and staff.</p></div><div class="col-md-4"><div class="panel module-typeC"><div class="panel-heading"><h3 class="text-align-center panel-title">Key Insights</h3></div><div class="panel-body"><h4 class="text-align-center">Data in this report show that:</h4> ol.IRolNumBox li { counter-increment: list; list-style-type: none; position: relative; margin-bottom: 15px; } ol.IRolNumBox li:before { color: #fff; content: counter(list); left:-35px; position: absolute; text-align: center; width: 30px; height:30px; background-color:#69b3e7; padding:0px; border-radius: 5px; padding:0px 0px 0px 0px ; font-weight:700; font-size:20px; top:-5px; } <ol class="IRolNumBox"><li>Hospitals are performing at or better than pre-pandemic levels on multiple measures of quality and patient safety, including patient falls and pressure injuries (i.e., bed sores) that reflect work led by nurses to care for patients.</li><li>Millions of patients report that their overall care experience is improving.</li><li>Press Ganey data from more than 1 million members of the health care workforce show a rebound from pandemic lows in engagement, resilience and safety culture.</li><li>Patient safety, patient experience, workforce experience, and well-being are all tied together by a hospital or health system’s culture of safety. Across clinical settings — the single largest driver of a patient’s reported experience of care is how well their care team members work together. Better teamwork has long been shown to drive better outcomes.</li></ol></div></div></div><div class="col-md-4"><div><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/03/AHA-Insights-Report-Improvement-in-Safety-Culture.pdf" target="_blank" title="Download the print version of the Insights Report: Improvement in Safety Culture Linked to Better Patient and Staff Outcomes">Download the Report PDF</a></div><div><a class="btn btn-wide btn-primary" href="/press-releases/2025-03-12-report-reveals-link-between-health-care-workforce-well-being-patient-experience-and-safety-outcomes" title="View the Press Release: Report Reveals Link Between Health Care Workforce Well-being, Patient Experience and Safety Outcomes in Hospitals">View the Press Release</a></div><div><a class="btn btn-wide btn-primary" href="/aha-patient-safety-initiative" target="_blank" title="Click here to visit the AHA Patient Safety Initiative landing page.">Learn More about the AHA Patient Safety Initiative</a></div><div><a href="/system/files/media/file/2025/03/AHA-Insights-Report-Improvement-in-Safety-Culture.pdf" target="_blank" title="Download the print version of the Insights Report: Improvement in Safety Culture Linked to Better Patient and Staff Outcomes"><img src="/sites/default/files/2025-03/PSW-PG-Report-Cover-352x456.jpg" alt="Cover image of the Insights Report: Improvement in Safety Culture Linked to Better Patient and Staff Outcomes" width="352" height="456"></a></div></div></div><div class="row"><div class="col-md-12"><h2>Evidence in Key Areas Show Care is Getting Safer</h2><p>The Press Ganey National Database of Nursing Quality Indicators (NDNQI) dataset reflects quality measures reported by 25,652 units across 2,430 inpatient acute care hospitals. Analysis of four key measures in NDNQI data includes catheter-associated urinary tract infection (CAUTI), central lineassociated bloodstream infection (CLABSI), patient falls that result in harm, the number of patients who develop hospital-acquired pressure injuries (HAPI), also known as bed sores. The analysis shows the incidence of all measures have declined since their pandemic peaks, with nearly all measures across all units back to or better than pre-pandemic levels.</p><div class="col-md-12"><img src="/sites/default/files/2025-03/PSW-Evidence-in-Key-Areas-img1-1120x372.jpg" alt="Medical-surgical / Critical care; Fall Rate: Rate of Patient Falls from 2019 to 2024 between both | CLABSI: Rate of Infections from 2019 to 2024 between both" width="1120" height="372"></div><div class="col-md-12"><img src="/sites/default/files/2025-03/PSW-Evidence-in-Key-Areas-img2-1120x370.jpg" alt="Medical-surgical / Critical care; CAUTI Rate: Rate of Infections from 2019 to 2024 between both | HAPI: percentage of Patients from 2019 to 2024 between both" width="1120" height="370"></div><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p><p><em><small><strong>Note:</strong> Falls are measured as total patient falls per 1,000 patient days; CLASBI is measured as central line-associated bloodstream infections per 1,000 central line days; CAUTI is measured as catheter-associated urinary tract infections per 1,000 catheter days; and HAPI prevalence is measured as the percentage of surveyed patients with hospital-acquired pressure injuries.</small></em></p></div><div class="col-md-12"><h2>Patients Say Their Care Experience and Perception of Safety are Improving</h2><p>Press Ganey works on behalf of 75% of U.S. acute care hospitals and medical practices across the country to survey patients regarding their care experiences and gain insights into how hospitals are working to deliver safe and effective care. Included in the surveys are questions that explicitly ask patients about their perception of staff’s efforts to keep them safe, along with questions about other facets of care that contribute to greater safety, such as teamwork among staff, attention and responsiveness to patient needs, and communication between patients and members of the clinical care team. Importantly, the data for this report, based on responses from 13 million patients, show steady gains in their perceptions of both experience of care and safety of care after a drop due to the COVID-19 pandemic. Results show hospitals and health systems are on the path to returning to pre-pandemic levels of safety.</p><img src="/sites/default/files/2025-03/PSW-Patients-Say-img1-1120x486.jpg" alt="National trends in patient experience: Likelihood to Recommend | Ambulatory surgery, Medical Practice, Inpatient, Emergency department - data between 64.5 to 85.3 between 2019 and Q1 of 2024" width="1120" height="486"><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p><p>One of the key factors driving improvements in patients’ perceptions of care is the teamwork of their caregivers. Across clinical areas — inpatient and outpatient, surgical and medical, emergency and scheduled — the single largest driver of a patient’s likelihood to recommend a hospital, facility or provider is perception on how well their care team members work together. Better teamwork has long been shown to drive better outcomes.</p> .IRcallOut01 { border: solid 2px #003087; padding:0px; overflow: auto; } .IRcallOut01 h2, .IRcallOut01>p, .IRcallOut01 h3{ text-align:center; } .IRcallOut01 h3{ background-color: #003087; color:#fff; padding:15px; } .IRcallOut01Insert{ background-color:#f6f6f6; padding: 5px 0px; margin-bottom: 15px; } .IRcallOut01 h4{ border-radius: 5px; padding:10px 10px 5px 10px; color:#fff; display: inline-block; margin-top:5px; margin-left: 15px; } .IRcallOut01 h4.IRcallOut01Red{ background-color:#d50032; } .IRcallOut01 h4.IRcallOut01Blue{ background-color:#69b3e7; } .IRcallOut01 h4.IRcallOut01LBlue{ background-color:#307fe2; } .IRcallOut01 h4.IRcallOut01Green{ background-color:#005844; } .IRcallOut01 h4.IRcallOut01Yellow{ background-color:#eaaa00; } .IRcallOut01 h4.IRcallOut01DRed{ background-color:#651d32; } .IRcallOut01 ul li:nth-child(1){ font-weight:700; color:#003087; } <div class="col-md-12 IRcallOut01"><h2>What earns patients’ confidence and loyalty?</h2><p>Patients are attuned to team dynamics and interpersonal competencies.</p><h3>National analysis of key drivers of likely to recommend by setting</h3><div class="col-sm-6 col-md-4"><div class="IRcallOut01Insert"><h4 class="IRcallOut01Red">Emergency</h4><ul><li>Staff worked well together</li><li>Cared about you as a person</li><li>Attention to your needs</li><li>Treat with courtesy/respect</li></ul></div></div><div class="col-sm-6 col-md-4"><div class="IRcallOut01Insert"><h4 class="IRcallOut01LBlue">Inpatient</h4><ul><li>Staff worked well together</li><li>Response to concerns</li><li>Attention to your needs</li><li>Attitudes toward requests</li></ul></div></div><div class="col-sm-6 col-md-4"><div class="IRcallOut01Insert"><h4 class="IRcallOut01Blue">Med Practice</h4><ul><li>Staff worked well together</li><li>Concern for questions/worries</li><li>Explanation of condition/problem</li><li>Include in decisions</li></ul></div></div><div class="col-sm-6 col-md-4"><div class="IRcallOut01Insert"><h4 class="IRcallOut01Green">Clinic</h4><ul><li>Staff worked well together</li><li>Treat with respect/dignity</li><li>Response to concerns</li><li>Trust skill of staff</li></ul></div></div><div class="col-sm-6 col-md-4"><div class="IRcallOut01Insert"><h4 class="IRcallOut01Yellow">Amb. Surgery</h4><ul><li>Staff worked well together</li><li>Response to concerns</li><li>Nurses’ concern for comfort</li><li>Provider response to concerns/questions</li></ul></div></div><div class="col-sm-6 col-md-4"><div class="IRcallOut01Insert"><h4 class="IRcallOut01DRed">Urgent Care</h4><ul><li>Staff worked well together</li><li>Provider listened</li><li>Explanation of condition/problem</li><li>Include in decisions</li></ul></div></div></div><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p><p>Similarly, patients who perceive that their care was safe are 2.5 to 3 times more likely to recommend their hospital to others. Their perceptions of safety are based on their own interactions with hospital team members, their observations regarding practices such as handwashing and cleanliness, and how they see team members interacting with one another to deliver care. Specifically, when asked about their confidence in the care they received and their willingness to recommend a hospital to others, patients ranked hospitals more highly when they perceived the hospital team to be working well together and to be attentive to the patients’ needs and questions.</p></div><div class="col-md-12"><h2>Workforce Experience and Well-being are Improving</h2><p>At its core, health care is a uniquely human experience centered around people caring for other people. This is why hospitals and health systems pay close attention to and invest in the well-being of their workforce. An energized and engaged workforce improves the care provided to patients, the physical and psychological wellbeing of patients, and how patients perceive the work to keep them safe. As the enormous strain of the COVID-19 pandemic recedes, the health care workforce is beginning to rebound as well. Press Ganey data from 1.7 million members of the health care workforce show a rise in their reported experience and resiliency. A resilient workforce is essential in health care, given the complex and high stakes nature of the work.</p><div class="col-md-12"><img src="/sites/default/files/2025-03/PSW-Workforce-Experience-img1-1120x609.jpg" alt="Gaining ground in resilience: Resilience and its sub-components of activation (meaning in work) and decompression (ability to disconnect) are on an upward trend. | 3-year trending: Activation, Resilience, Decompression - Reported Satisfaction Score between 2022 and 2024 & Item-level change vs 2023 benchmark; Activation: Work makes a difference - +.03, Work is meaningful - +.03, Care for all patients equally - +.02, See patient as an indvidual person - .01 / Decompression: Able to free mind when away from work - +.08, Rarely lose slepp over work - +.07, Disconnect from comm's during free time - +.06, Enjoy personal time without focus on work - .05 " width="1120" height="609"></div><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p><p>Hospitals that score higher on team member engagement surveys also see higher patient experience scores reported from patients. This correlation gets more pronounced every year, with the top performing quartile of hospitals on staff engagement in 2023 scoring in the 80th percentile on patients’ likelihood to recommend.</p><div class="col-md-12"><img src="/sites/default/files/2025-03/PSW-Workforce-Experience-img2-1120x485.jpg" alt="Likelihood to recommend is correlated with team engagement and correlation is getting stronger: Inpatient Likelihood to Recommend (percentile rank); 2021 for Engagement Quartile, Engagement Quartile" width="1120" height="485"></div><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p></div><div class="col-md-12"><h2>Safety Culture is Essential</h2><p>A critical factor in generating both better patient outcomes and care teams’ engagement in their work is a strong safety culture. A strong safety culture supports the teams through the demanding tasks associated with care delivery and makes a noticeable difference in how patients experience their care, leading to safer care and a more resilient care delivery system.</p><p>A culture of safety is an environment in which everyone, including patients and families:</p><ul class="arrow"><li class="arrow">Can speak up when they see something that might not be right.</li><li class="arrow">Is confident that improvements occur when issues are reported.</li><li class="arrow">Is dealt with fairly and compassionately when an error occurs.</li><li class="arrow">Experiences effective teamwork and communication.</li></ul><p>An organization’s safety culture is assessed with evidence-based survey tools, such as the instrument Press Ganey developed, which gather responses from over 1 million hospital staff each year. The Press Ganey data show a positive relationship between the level of care team engagement in their work and the hospital scores for patient safety culture. When caregivers feel that they are supported, working with an effective team and doing meaningful work, they are more likely to be deeply engaged in their work.</p><div class="col-md-12"><img src="/sites/default/files/2025-03/PSW-Safety-Culture-img1-1120x322.jpg" alt="Engagement top performers have a strong Culture of Safety: All employees - Engagement 3.99 = path 51.5% with a high Saftey Vulture Score - 4.51 (97th), path 48.5% with a low Saftey Culture Score - 3.44 (2nd) | 95 percentile-rank difference in employee engagement" width="1120" height="322"></div><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p></div><div class="col-md-12"><h2>Opportunities to Enhance Safety Culture</h2><p>In the aftermath of the COVID-19 pandemic, hospitals’ performance in both safety culture and quality and safety metrics have rebounded and begun to plateau. Resources and teamwork remain areas with the greatest potential for growth. While prevention and reporting experienced an increase previously, the recent downward trend highlights the need for ongoing prioritization.</p><div class="col-md-12"><img src="/sites/default/files/2025-03/PSW-Opportunities-to-Enhance-img1-1120x479.jpg" alt="National Safety Culture Scores on the rebound; Saftey Culture Overall: Mean Score between 2019 and 2024 - average 4, Prevention & Reporting - average 4.14, Pride & Reputaion - average 4.15, Resources & Teamwork - average 3.7" width="1120" height="479"></div><p><em><small><strong>Source:</strong> ©2025 Press Ganey. All rights reserved; a PG Forsta company.</small></em></p><p>Press Ganey’s data establish how closely all of these outcomes — patient safety outcomes, patient experience, workforce engagement experience and resilience — are tied together by a hospital or health system’s culture of safety.</p></div><div class="col-md-12"><h2>A Continuous Journey to Improve</h2><p>Improvement is a continuous pursuit, and hospitals have been and will remain deeply committed to advancing the safety and quality of their care, the way in which patients experience care, and the wellbeing of their care teams. By improving the patient and workforce experience, identifying and addressing risks to patient or staff wellbeing, improving communications and understanding of what patients and their families value in their care experience, and implementing innovative strategies, hospitals will continue to demonstrate their commitment to patient safety.</p><p>One of the key goals of the <a href="/aha-patient-safety-initiative" title="Learn more about the AHA Patient Safety Initiative">���������� Association’s Patient Safety Initiative</a> is to help hospitals and health systems improve the culture of safety. Launched in 2023, AHA’s Patient Safety Initiative catalyzes hospitals’ and health systems’ collective expertise and momentum for improvement and focuses on 1) safety culture, 2) identifying and addressing disparities in health care outcomes, and 3) the wellbeing of the workforce.</p><p>Through the work of the Patient Safety Initiative, hospitals and health systems are using safety improvement strategies that have a history of success, as well as trying new and innovative approaches to further enhance their work.</p><p>To help leaders and boards learn from their counterparts in other hospitals and health systems, AHA has produced the Leading for Safety video series hosted by former Chair of the AHA Board of Trustees Mindy Estes, M.D., and featuring leaders from hospitals and health systems that have been recipients of AHA’s Quest for Quality award. The AHA’s Safety Speaks podcast series also features many quality and safety leaders talking about their innovative approaches to safety.</p></div></div></div> Tue, 11 Mar 2025 09:28:08 -0500 Guides/Reports /guidesreports/growing-impact-medicare-advantage-rural-hospitals-across-america <div class="raw-html-embed"> /* for the replacement of bullets */ ul.ArrowRed, ul.ArrowBlue { list-style: none; /* Remove default bullets */ padding-left: 25px; } ul.ArrowRed li, ul.ArrowBlue li { margin-bottom: 7px; line-height: 1.5em; } ul.ArrowRed li::before, ul.ArrowBlue li::before{ content: "➨"; font-size: 1.5em; margin-right: 5px; display: inline-block; height: 12px; width: 12px; position: relative; top: 3px; font-weight: 700px; } ul.ArrowRed li::before, ul.ArrowRed strong{ color: #9d2235; } ul.ArrowBlue li::before, ul.ArrowBlue strong{ color: #307fe2; } ul.ArrowRed li, ul.ArrowBlue li { padding-left: 15px; text-indent: -15px; } ul.ArrowBlue strong{ color: #307fe2; } strong sup{ color: #9d2235; } </div><div class="container"><div class="row"><div class="col-md-9"><h2>Executive Summary</h2><p>Rural hospitals play a vital role in the health and economic stability of their communities, serving as lifelines for care and major local employers. However, these hospitals face  mounting financial pressures<br>that jeopardize their ability to provide essential  services.<img src="/sites/default/files/inline-images/image_44.png" data-entity-uuid="a4d7696f-9efe-4d3a-992d-ab3558613bff" data-entity-type="file" width="293" height="333" class="align-right"></p><ul class="ArrowRed"><li>The Medicare Advantage (MA) program has expanded rapidly and now accounts for more than half of total Medicare enrollment. While MA offers some benefits, certain plans reimburse hospitals below cost, delay or deny payments, and impose significant administrative hurdles, especially to rural hospitals, which have seen the fastest growth in MA recently. These risks exacerbate existing challenges like staffing shortages and unfavorable payer mixes. Over 100 rural hospitals have closed or converted to other provider types in the last decade, and according to Dobson DaVanzo & Associates, LLC, 429 rural hospitals are at high financial risk.<strong><sup>1</sup></strong> Addressing the impact of MA on rural hospital finances is critical to safeguarding care access for millions of Americans in underserved areas.</li></ul><p>This report explores how certain MA plans’ practices exacerbate rural hospitals’ vulnerability and threaten health care access for rural communities. Here are the report’s key findings:</p><ul class="ArrowBlue"><li><strong>Reimbursement well below the cost of care: </strong>Traditional Medicare often pays less than the cost of care, and increasingly rural hospitals report that MA plans pay even less — only 90.6% of Traditional Medicare rates on a cost basis, according to industry benchmark data provided by Strata Decision Technology, LLC (see chart).</li><li><strong>Diminished access to quality care:</strong> Delays, denials, and excessive prior authorization from certain MA plans can hinder timely care: 81% of rural clinicians report quality reductions due to insurer requirements, and MA patients face 9.6% longer stays before post-acute care compared to similar Traditional Medicare patients.</li><li><strong>Administrative burdens and payment challenges: </strong>Delayed or denied MA payments worsen rural hospitals’ finances and increase administrative burdens. Nearly 4 in 5 rural clinicians report higher administrative tasks in five years, with 86% seeing negative impacts to patient outcomes.</li></ul><p>Medicare enrollees will continue to choose MA plans and, as enrollment grows, it is ever more important that the program works both for the enrollee and the providers who care for them. Unsustainable reimbursement rates and administrative burdens strain these hospitals’ ability to deliver critical care in underserved areas. Meaningful oversight and reform are needed to ensure rural hospitals receive fair, timely reimbursement and can continue delivering high-quality care to their communities.</p><h2><span>Introduction</span></h2><p>Hospitals and health systems play a vital role in supporting the health and well-being of rural communities across the United States. They also serve as key economic drivers, creating jobs and stimulating local economic growth. Despite their critical importance, rural hospitals face a host of financial challenges that threaten access to care for the 46 million Americans living in rural areas.<strong><sup>2</sup></strong>  Many of these difficulties have been well documented, including staffing shortages, low patient volumes and heavy reliance on payers that reimburse below the cost of care.<strong><sup>3</sup></strong> Less recognized, however, is the impact of the rapid expansion of Medicare Advantage (MA) plans and the impact of certain MA practices on rural hospitals. Based on both quantitative and qualitative analyses, including interviews with rural hospital leaders, this report finds that the practices used by some MA plans pose several distinct risks to rural communities:</p><ul class="ArrowRed"><li><strong>Reimbursement well below the cost of care:</strong> Traditional Medicare is broadly recognized as paying below the cost of care.<strong><sup>4</sup></strong> Increasingly, rural hospitals report that MA plans pay even less. Industry benchmark data provided by Strata Decision Technology, LLC shows that MA plans reimburse rural hospitals at just 90.6% of Traditional Medicare rates on a cost basis.</li><li><strong>Diminished access to quality care:</strong> Excessive insurer delays and denials of care as well as cumbersome prior authorization requirements from certain MA plans interfere with clinicians’ ability to provide timely and effective care. For example, 81% of rural clinicians report reduced quality of care due to insurer requirements, and MA patients experience longer lengths of stay — 9.6% longer on average before discharge to post-acute care — compared to clinically-similar Traditional Medicare patients.</li><li><strong>Administrative burdens and payment challenges:</strong> Delayed or denied payments by certain MA plans compound financial difficulties for rural hospitals, including by adding substantial administrative costs. Nearly 4 in 5 rural clinicians report significant increases in administrative tasks over the past five years, with 86% reporting this leading to negative impacts on patient outcomes.<strong><sup>5</sup></strong></li></ul><p>Each of these challenges disproportionately strain rural hospitals with limited resources and persistent staffing shortages. Rural hospitals already contend with a challenging payer mix as they disproportionately serve older, sicker patients who are more likely to be covered by Medicare or Medicaid — programs that typically reimburse well below the cost of care. Facing MA’s below-cost reimbursements, many rural hospitals may lack the leverage to negotiate better rates with large, national insurers, leaving them forced to accept unsustainable contracts.</p><p>Ultimately, growth in MA enrollment is compounding the financial pressure on rural hospitals, which are already struggling to stay afloat.<strong><sup>6  </sup></strong>Over 100 rural hospitals have closed or converted to other provider types in the last decade, and according to Dobson DaVanzo & Associates, LLC, 429 rural hospitals are at high financial risk.<strong><sup>7</sup></strong> Meanwhile, MA enrollment in rural areas has surged, quadrupling since 2010.<strong><sup>8</sup></strong> At its current growth rate, MA enrollment is projected to surpass half of all rural Medicare enrollment by this year.<strong><sup>9</sup></strong></p><p><strong>Given the growing presence of MA plans in rural communities, meaningful reforms are needed to ensure fair and timely reimbursement and reduce the excessive administrative burden on rural providers. Without these changes, this added financial pressure may force more rural hospitals to cut services or close altogether, further limiting health care access in already underserved communities.</strong></p><h2><span>The Rise of MA and Associated Challenges for Rural Hospitals</span></h2><p>Over the past decade, total MA enrollment in the U.S. has surged by 120%, increasing from 15 million beneficiaries in 2014 to 33 million in 2024 — or 54% of total Medicare enrollment. The Congressional Budget Office (CBO) projects that by 2034, MA will cover 64% of all Medicare beneficiaries.<strong><sup>10</sup></strong></p><p><img src="/sites/default/files/inline-images/image_41.png" data-entity-uuid="e00bff56-8d0c-41cd-b082-0f87075ef2a5" data-entity-type="file" width="557" height="463" class="align-left"></p><p><br>In rural areas, MA penetration has reached or exceeded 50% of the Medicare market in an increasing number of counties.<strong><sup>11,12</sup></strong> Nationwide, the proportion of hospitals with more MA inpatient days than Traditional Medicare inpatient days nearly tripled over a five-year period ending in 2023. This shift is more striking in rural hospitals, where the share grew by more than tenfold (see Figure 1).</p><p>For rural hospitals, the share of MA inpatient days as a proportion of all Medicare inpatient days more than doubled over that same period (105.7%), outpacing the 56% growth seen across all hospitals (see Figure 2).<strong><sup>13</sup></strong> </p><p><img src="/sites/default/files/inline-images/image_42.png" data-entity-uuid="e9f40aff-6603-45fd-8497-4b004a09387b" data-entity-type="file" width="425" height="501" class="align-left"></p><p>The growth of MA enrollment in rural areas can be attributed to several factors. Broadly, many beneficiaries may choose to enroll in an MA plan to receive supplemental benefits, such as cost-sharing protections (e.g., out-of-pocket maximum limits) and/ or medical benefits (e.g., vision, hearing and dental), that are not available under Traditional Medicare. In other cases, employers may offer MA plans as a retirement benefit with the same insurer as used for individuals’ employer-sponsored coverage, helping promote continuity of care. Furthermore, in 2020, the Centers for Medicare & Medicaid Services (CMS) issued regulatory changes that loosened network adequacy standards for MA plans in rural areas, with further flexibilities provided to rural MA plans that included certain types of telehealth providers in their networks. These changes helped increase the number of MA plans with compliant networks in rural areas and led to an expanded number of MA plan options for rural beneficiaries.</p><p>However, this rapid expansion has left stakeholders and policymakers grappling with its implications for the health care system. Several concerns have already emerged regarding the practices of certain MA plans. Investigations have revealed that these plans frequently use claim denials, prior authorization requirements and other administrative tactics that delay or deny care to patients, which in turn delays and denies payments to hospitals.<strong><sup>14</sup></strong> Inadequate reimbursement for services that these plans do cover further compounds hospital losses.  </p><h2><span>MA’s Eroding Payments to Rural Hospitals</span></h2><p><span>Many MA plans reimburse hospitals, including those in rural areas, at lower rates than Traditional Medicare, which already pays below the cost of care. An AHA analysis using industry benchmark data provided by Strata Decision Technology, LLC found that in 2023 MA plans reimbursed rural hospitals at just 90.6% of Traditional Medicare rates on a cost basis (see Figure 3).</span></p><p> <img src="/sites/default/files/inline-images/image_43.png" data-entity-uuid="357a20c4-a198-4c00-b166-4965e70ded05" data-entity-type="file" width="578" height="509" class="align-left">These lower payment-to-cost ratios can be attributed to both higher non-clinical costs associated with treating MA patients (due in part, for example, to longer lengths of stay for MA enrollees as a result of post-acute care prior authorization delays) and lower reimbursement rates. An AHA analysis of hospital prices using price transparency data from Turquoise Health<strong><sup>15</sup></strong> found that average MA rates for common Medicare Severity Diagnosis Related Groups (MS-DRGs) fell between 91% and 94.5% of hospital-specific Traditional Medicare rates (see Table 1). And the trend is worse for certain types of rural hospitals. For example, in 2023, Medicare dependent and low-volume hospitals received average MA rates amounting to just 85% of what they would have received under Traditional Medicare, according to industry benchmark data provided by Strata Decision Technology, LLC. Even critical access hospitals (CAHs), which are reimbursed by Traditional Medicare based on the cost of care, received only 95% of Traditional Medicare rates from MA plans on a cost basis, according to industry benchmark data provided by Strata Decision Technology, LLC. This can result in effectively undermining the intent of the CAH program. Overall, the AHA estimates that this lack of payment parity cost rural hospitals over $1 billion in 2023. Those losses are only expected to climb.</p><img src="/sites/default/files/inline-images/image_31.png" data-entity-uuid="e6206f59-9844-4a6d-a06c-1b9f7b88e837" data-entity-type="file" alt="Image of Table 1" width="1284" height="423"><p>The implications of this payment disparity are far reaching. Rural hospitals rely more heavily on total Medicare revenues to maintain their operations. While Medicare made up 37% of total hospital revenues nationwide in 2023, it accounted for 43% of revenues for rural hospitals.16 Consequently, rural hospitals are more reliant on revenues from MA than ever before. In fact, over the last five years, MA revenues as a share of total Medicare revenues have grown from 11.4% to 17.6%.<strong><sup>17</sup></strong></p><img src="/sites/default/files/inline-images/image_38.png" data-entity-uuid="ddbe4996-80ed-4b21-8904-8396c22d91b9" data-entity-type="file" width="1276" height="835"><h2><span>Administrative Burden Impacts on Costs and Patient Access to Care in Rural Communities</span></h2><div><p>Adding to these financial strains, rural hospitals are grappling with increasing administrative burdens driven by the operational practices of certain MA plans. For example, a Kaiser Family Foundation report found that prior authorization requests in MA surged to nearly 50 million in 2023, a 43.9% increase from 2020.<strong><sup>18</sup></strong> And despite these authorizations, hospitals face increasing care denials and withheld payments for essential care.<strong><sup>19</sup></strong> For rural hospitals that often operate with limited staffing, technology <img src="/sites/default/files/inline-images/image_34.png" data-entity-uuid="493086e2-2917-4bf1-91dd-007d64bf7cc3" data-entity-type="file" width="331" height="180" class="align-right">and other resources, these practices present substantial challenges to their workflow and budgets, while patients face delays and uncertainty in receiving timely care.</p></div><p>Care delays often mean increased costs for hospitals and health systems, particularly when plans prevent hospitals and health systems from discharging patients in a timely manner to the next site of care. A recent report by the Senate Permanent Subcommittee on Investigations found that certain MA plans disproportionately targeted post-acute care facilities with claim denials and prior authorization requirements.<strong><sup>20</sup></strong> In fact, an AHA analysis of industry benchmark data provided by Strata Decision Technology, LLC revealed that in 2024, rural hospital patients covered by MA plans experienced an average length of stay 9.6% longer prior to discharge to a post-acute care setting compared to those covered by Traditional Medicare (see Figure 4). This represents a 46% growth in the difference in average length of stay for MA patients relative to Traditional Medicare between 2019 and 2024.</p><img src="/sites/default/files/inline-images/image_35.png" data-entity-uuid="eeb616fa-d5a3-4e07-bdb2-cb18614309c4" data-entity-type="file" alt="Figure 4 image" width="758" height="462"><p><br>Care delays and denials also can have a cascading effect on health outcomes for patients. A recent AHA survey conducted by Morning Consult found that 81% of clinicians practicing in rural communities reported reductions in quality of care to patients as a result of insurer administrative requirements. Sadly, MA enrollees experience a disproportionate number of these delays. A Commonwealth Fund survey found that 22% of MA enrollees experienced care delays due to prior authorization, nearly double the rate for Traditional Medicare (13%).<strong><sup>21</sup></strong> Similarly, a 2022 Health and Human Services Office of Inspector General report revealed that MA plans inappropriately denied up to 85,000 prior authorization requests in 2019 and rejected nearly 20% of reimbursement claims that met Medicare coverage rules.<strong><sup>22</sup></strong>  These inappropriate denials also impose a staggering financial toll on hospitals, which collectively spend an estimated $20 billion annually contesting health plan denials.<strong><sup>23</sup></strong></p><p>In addition, these administrative burdens also weigh heavily on hospitals’ staff — the nurses, physicians, therapists, financial counselors and others — exacerbating burnout and diminishing the quality of care. This burden ultimately makes it more challenging for rural hospitals to staff these positions. The same AHA survey conducted by Morning Consult found that nearly 4 in 5 clinicians in rural communities report increases in insurer-required administrative tasks over the past five years, with over half describing this burden as high or extremely high. Alarmingly, 86% noted negative impacts on patient outcomes. Such findings underscore the human cost of administrative burden, where increasing operational challenges directly undermine the mission of rural hospitals to deliver timely and effective care to their communities.</p><img src="/sites/default/files/inline-images/image_37.png" data-entity-uuid="5c2d2729-54e1-42cc-b698-f3b4a2f92258" data-entity-type="file" alt="Case Study Image Challenges of certain MA Plans on Patient Care at Great Plains Health" width="1277" height="985"><h2><span>Conclusion</span></h2><p>Medicare enrollees will continue to choose MA plans and, as enrollment grows, it is ever more important that the program works both for the enrollee and the providers who care for them. The growing presence of MA plans in rural communities presents significant challenges for rural hospitals. As MA plans reimburse rural hospitals at unsustainable rates and impose administrative hurdles, they continue to strain hospitals’ ability to provide critical services in underserved areas. Meaningful oversight and reform are needed to ensure rural hospitals receive fair, timely reimbursement and can continue delivering highquality care to their communities.</p><p>In response, several bipartisan bills have been introduced to better regulate MA prior authorization processes and alleviate the arduous paperwork burden placed on hospitals serving MA patients. Additionally, a CMS rule clarified “clinical criteria guidelines to ensure people with MA receive access to the same medically necessary care they would receive in Traditional Medicare.” However, hospitals have noted little improvement since the rule’s finalization in January.<strong><sup>24</sup></strong></p><h2><span>Here are several AHA recommendations:</span></h2><ol><li><span><strong>Streamline prior authorization processes to protect timely access to medical care and drugs covered under the medical benefit</strong>.</span> To accomplish this, the AHA supports the Improving Seniors’ Timely Access to Care Act, which would streamline prior authorization requirements in MA. The bill would make significant progress toward reducing complexity and promoting uniformity in prior authorization processes and requirements that frustrate both patients and providers. Additionally, the bill would significantly increase the specificity of prior authorization data reported by plans, which will give the Department of Health and Human Services greater insight into problematic plan processes and enable more targeted enforcement of policies designed to protect patient access to necessary care. The legislation also would apply provisions that streamline prior authorization to clinic-administered drugs covered under the medical benefit, such as injections typically used to treat cancer and other complex diseases.</li><li><span><strong>Cost-based reimbursement for CAHs from MA plans.</strong></span> Congress created a special statutory payment designation for CAHs in recognition of the unique role they play in preserving access to health care services in rural areas. As the MA program is growing rapidly in rural communities, this important financial protection is being eroded. Indeed, a greater portion of a CAH’s revenue is subject to negotiation with MA plans that often result in below-cost payment terms and involve onerous plan requirements that contribute to administrative burden, unnecessary delays and denials in approving and paying for patient care, as well as additional strains on the health care workforce. The AHA supports legislation to ensure CAHs receive cost-based reimbursement for MA patients.</li><li><span><strong>Ensure prompt payment from insurers for medically necessary, covered health care services delivered to patients</strong></span><strong>.</strong> The AHA supports policies that would require timely payment to providers to ensure they have the resources they need to pay staff and acquire the supplies to care for patients.</li><li><span><strong>Require MA plan clinician reviewers who review coverage denials (adverse determinations) to provide their name and credentials and attest they meet existing CMS rules and have relevant training and expertise in the requested service.</strong></span> As health plans play an important role in patient care through their coverage policies, it is important that patients’ clinicians and regulators know who is making determinations that impact whether a patient can access the medically necessary care they need in a timely manner.</li><li><span><strong>Improve data collection, reporting and transparency in the MA program with a focus on metrics that are meaningful indicators of patient access, such as appeals, grievances and denials.</strong></span><strong> </strong>These data will provide patients, state and federal regulators, and other stakeholders with the information necessary to hold health plans accountable for meeting their obligations to beneficiaries. These data could be used, for example, to target for audits those plans with inappropriate or questionable practices and identify and apply penalties to health plans that are noncompliant with federal rules.</li><li><span><strong>Expand network adequacy requirements for certain post-acute sites of care.</strong></span> To help mitigate the cost of caring for patients ready for discharge to post-acute care but who face health plan authorization delays, MA plans should be required to explicitly cover services in all post-acute sites of care. Specifically, inpatient rehabilitation facilities, long-term care hospitals and home health agencies<strong><sup>25</sup></strong> should be added to MA network adequacy requirements and standards should be adopted to ensure there are a sufficient number and type of each PAC facility in MA networks.</li></ol><p><span><strong>End Notes:</strong></span></p> .NoLinkColor a{ color: #333; text-decoration: none; } .NoLinkColor a:hover{ color: #003087; } <div class="NoLinkColor"><p>____________________________________________________________<br><br><span>1</span> <a href="https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/" target="_blank">https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/</a></p><p><span>2</span>  <a href="https://www.ers.usda.gov/topics/rural-economy-population/rural-classifications/what-is-rural#:~:text=In%202020%2C%20 46%20million%20people,percent%20of%20the%20U.S.%20population" target="_blank">https://www.ers.usda.gov/topics/rural-economy-population/rural-classifications/what-is-rural#:~:text=In%202020%2C%2046%20million%20people,percent%20of%20the%20U.S.%20population</a></p><p><span>3</span>  <a href="/2022-09-07-rural-hospital-closures-threaten-access" target="_blank">/2022-09-07-rural-hospital-closures-threaten-access</a> </p><p><span>4</span>  <a href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC-3.pdf " target="_blank">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC-3.pdf</a></p><p><span>5</span>  This poll was conducted by Morning Consult on behalf of the ���������� Association (AHA) between October 30 – November 15, 2024, among a sample of 1,001 clinicians.</p><p><span>6</span> <a href="/system/files/media/file/2022/09/rural-hospital-closures-threaten-access-report.pdf" target="_blank">/system/files/media/file/2022/09/rural-hospital-closures-threaten-access-report.pdf</a></p><p><span>7</span> <a href="https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/">https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/</a></p><p><span>8</span>  <a href="https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-plan-availability-and-premiums-in-rural-areas/" target="_blank">https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-plan-availability-and-premiums-in-rural-areas/</a></p><p><span>9</span>  <a href="https://rupri.public-health.uiowa.edu/publications/policybriefs/2025/2024%20MA%20Enrollment%20Update.pdf">https://rupri.public-health.uiowa.edu/publications/policybriefs/2025/2024%20MA%20Enrollment%20Update.pdf</a></p><p><span>10</span> <a href="https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/" target="_blank">https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/</a> </p><p><span>11</span> <a href="https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/">https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/</a></p><p><span>12</span> <a href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC.pdf" target="_blank">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC.pdf</a> </p><p><span>13</span> AHA analysis of Medicare Cost Report data between FY 2018 and FY 2023. </p><p><span>14</span> <a href="https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raise-concerns-about-beneficiary-access-to-medically-necessary-care/" target="_blank">https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raiseconcerns-about-beneficiary-access-to-medically-necessary-care/</a> </p><p><span>15</span> The views and opinions expressed reflect only the AHA’s sentiment and do not necessarily reflect the official position of Turquoise Health. </p><p><span>16</span> AHA analysis of AHA Annual Survey data from 2023. </p><p><span>17</span> AHA analysis of AHA Annual Survey data between 2019 and 2023. </p><p><span>18</span> <a href="https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/" target="_blank">https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/ </a></p><p><span>19</span> <a class="ck-anchor" href="https://www.nbcnews.com/health/rejecting-claims-medicare-advantage-rural-hospitals-rcna121012" id="https://www.nbcnews.com/health/rejecting-claims-medicare-advantage-rural-hospitals-rcna121012">https://www.nbcnews.com/health/rejecting-claims-medicare-advantage-rural-hospitals-rcna121012</a></p><p><span>20</span> <a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a> </p><p><span>21</span> <a href="https://www.commonwealthfund.org/publications/surveys/2024/feb/what-do-medicare-beneficiaries-value-about-their-coverage" target="_blank">https://www.commonwealthfund.org/publications/surveys/2024/feb/what-do-medicare-beneficiaries-value-about-their-coverage</a> </p><p><span>22</span> <a href="https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raise-concerns-about-beneficiary-access-to-medically-necessary-care/" target="_blank">https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raiseconcerns-about-beneficiary-access-to-medically-necessary-care/</a> </p><p><span>23</span> <a href="https://premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimate-medical-claims" target="_blank">https://premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimatemedical-claims</a> </p><p><span>24</span> <a href="https://www.beckershospitalreview.com/finance/unnecessary-medicare-advantage-denials-harming-louisiana-patientscrowding- our-emergency-departments-and-costing-u-s-providers-billions.html" target="_blank">https://www.beckershospitalreview.com/finance/unnecessary-medicare-advantage-denials-harming-louisiana-patientscrowding-our-emergency-departments-and-costing-u-s-providers-billions.html</a> </p><p><span>25</span> Skilled nursing facilities are already included in MA plan network adequacy requirements.<br> </p></div></div><div class="col-md-3"><p> </p><p> </p><p><a class="btn btn-wide btn-primary" href="/press-releases/2025-02-19-new-aha-report-shows-growing-pressure-medicare-advantage-rural-hospitals-ability-care-communities" target="_blank" title="Click here to view the Press Release: New AHA Report Shows Growing Pressure of Medicare Advantage on Rural Hospitals’ Ability to Care for Communities.">View the Report Press Release</a></p><p><a href="/system/files/media/file/2025/02/growing-impact-of-medicare-advantage-on-rural-hospitals.pdf"><img src="/sites/default/files/inline-images/cover-medicare-advantage-in-rural-hospitals.png" data-entity-uuid="fcf92c40-00fd-48bc-8a6a-9a6c3dddb78f" data-entity-type="file" alt="Image of report cover." width="653" height="845"></a></p><p><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/02/growing-impact-of-medicare-advantage-on-rural-hospitals.pdf" target="_blank" title="Click here to download the Report: The Growing Impact of Medicare Advantage on Rural Hospitals Across America PDF.">Download the Report PDF</a></p></div></div></div> Wed, 19 Feb 2025 13:46:46 -0600 Guides/Reports /change-healthcare-cyberattack-underscores-urgent-need-strengthen-cyber-preparedness-individual-health-care-organizations-and <div><div><h1>Change Healthcare Cyberattack Underscores Urgent Need to Strengthen Cyber Preparedness for Individual Health Care Organizations and as a Field</h1></div></div> h1 { color:#ffffff; padding:20px; } h2 { color: #9d2235; } h3 { color: #003087; } .sidebar { background: #b9d9eb40; } .sidebarpara { color: #002855; padding: 20px; } Wed, 19 Feb 2025 10:59:32 -0600 Guides/Reports /guidesreports/2025-02-14-aha-commissioned-report-challenges-inappropriate-conclusions-regarding-long-term-care-hospitals <div class="container"><div class="row"><div class="col-md-8"><p>The ���������� Association (AHA) released a new analysis conducted by the prominent health care economics and policy consulting firm Dobson DaVanzo & Associates, LLC (Dobson). The analysis critiques the findings of an academic paper that misconstrues the facts and draws faulty conclusions regarding the role of long-term care hospitals (LTCHs).<sup>1</sup> Specifically, in its comprehensive critique of the paper by Einav and colleagues (Einav paper), Dobson’s economists and analysts rebut the findings and implications of the paper by analyzing the data, assumptions, econometric approach and methodologies. Ultimately, Dobson found that the conclusions reached by the study are not warranted and represent an overreach of the facts.</p><p>LTCHs play an important and unique role for Medicare and other beneficiaries by caring for the most severely ill patients who require extended hospitalization. As discussed in the Dobson analysis, LTCHs offer an intensive level of care that is not normally provided in other post-acute care settings. LTCH patients are typically very medically complex, with multiple organ failures, and stay in the LTCH on average at least 25 days. Many LTCH patients depend on ventilators due to respiratory failure or similar ailments, which require highly specialized care. In addition, LTCHs are critical partners for acute-care hospitals, alleviating capacity for overburdened intensive care units and other parts of the care continuum that would otherwise be further strained without access to LTCHs for these patients.</p><p>Dobson’s report identified numerous shortcomings in the Einav paper. Some of the most problematic include:</p><ul><li>Use of data that is more than 10 years old, despite dramatic payment reforms and other changes in the field since that time.</li><li>Weak assumptions about substitutability of LTCH care with non-hospital care provided in skilled-nursing facilities.</li><li>Narrowly defined outcomes that do not include the totality of health spending or care outcomes for Medicare beneficiaries.</li><li>Econometric shortcomings involving sensitivity analysis, misspecification errors, variable bias and others.</li><li>Research that contradicts the paper’s findings and which supports the value and unique role that LTCHs fulfill in caring for beneficiaries.</li><li>Bias and other weakness with the external and internal validity of the paper.</li><li>Failure to consider alternative factors that contribute to the observed variations in spending.</li></ul><p>Dobson’s critique of these defects in the Einav paper underscores the importance of not using it to support policymaking or other decisions regarding the Medicare program. Instead, policymakers should consider the input of the doctors and other experts who support the LTCHs role in the care continuum for severely ill patients.</p><p>For questions or more information about this report, please contact Jonathan Gold, AHA’s senior associate director of post acute payment policy, at <a href="mailto:jgold@aha.org">jgold@aha.org</a>. </p><p>__________<br><small><sup>1</sup> Liran Einav, Amy Finkelstein & Neale Mahoney, July 2023. "Long-Term Care Hospitals: A Case Study in Waste," The Review of Economics and Statistics, MIT Press, vol. 105(4), pages 745-765.</small></p><div><p class="text-align-center">###</p><p><strong><u>About the ���������� Association (AHA)</u></strong></p><p>The ���������� Association (AHA) is a not-for-profit association of health care provider organizations and individuals committed to improving their communities' health. The AHA advocates on behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups. Founded in 1898, the AHA provides insight and education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at <a href="https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Flink.mediaoutreach.meltwater.com%2Fls%2Fclick%3Fupn%3DOYJSCMTyBhNCCTfI0zdwszOYn3sJE-2FXqs5pFQbQToVu1czeS7DyxR-2FigHWVFiRY4Oo6oAgJXLD947TA-2BGEZyx1U-2BxMxhwGCmeu3hpBv62ixi4Gaoj3ungeoEa3-2FYAHGK3BHm7IClPMOpqGGuehZcHKd2iz31UD7RKmKyCEcMXRTnoh8yBlJu8acmYAALrp6EOP-2Ft3cnmMdvK5nqZdJSXLePqsym9B6l3-2FhTMq7-2Bb8JosjEZoUHARSNRXcRhjtYuUW8b3Ruh3OnqTtP1rycsXtU4hb5fYexe1wss235Q3FCy9uHmriYCFIBuZf8PnpO5pyRJ-2FfmPIBok22615K4oIqgUtbmSmoQxAPJDlI7OGQnCH5suHHwqHxLuBPxjhw3x0S-2BOlVbfr1tyv5q4WDmwhJfnRB1I2CVYvbzsfDnVWzRIoFI5EC2XZl5-2BaBihF3e-2FZvUWbpesKDlmo2VQLhaEk7M6hRO-2FHBlIG-2BTjT7VkJw709CcEkALVTPDz8y0UzEZs0GoIuPdJHeZARIbFOa9gR6fjMkrPAI6LO9FTom-2BexnSp9GQ4l5mmgXaZ7CsIwtMrheRImxdy5MBp05eji1HpT-2FNeN3hN6rYbIdat8ariKfBzqMjtOAgMDnZCRiHvatebOaiSETOoI2jYpwKKhpJNfNHrF0zx672dz7CsT5YmZ5HXzolBt0R012j2tkbYqtPNOY8oBz1wGPjBnTq9EPST8F-2BW8-2FYikePbYBMDgUMo0nlUeQBC8AZre7rJcTTITJnjl-2BNiFadG9NwKiA-2FxQgjk7VqHqHGjMpXr5hphWufxQss37NhkSCN3PHCfPGELMAyVsuWEKFwhoII57va6Oc-2FP5fsy4s0pxWYIqbY7TFBxC4wv2vIQPbuK-2Ffgk92daVI0JbCyEOx-2BFh5dH28vCEzpcdfxN7krdKp1FgVQ77i4Sezf0l7WnGrdsLMGXrQAqt9yGU-2BRKCi2ifh3BBnB5JbeuGETPkYqxtKSPZi-2BtIy8eF9puF4krxKbkq8cKiKnElAahdVAnleE-2FzQ7bHPiUMu3JZ72gbqCPI5qXrELa9W2-2Fu-2FiJArYirVKXaV8uTZytnN7QZGhEDdUUzOBh5hjtGiUnGFG-2FbedfAFF738UgbctI6-2F6LwvaxUTT-2F3f5-2BYAtNOA3gFIkr0YZI-2Bkp0pooE3R22sTgBSNmdXiivkpApx6Ei-2BDX8-3D3DAA_kFmn947cPXeH4Nw5FKo9qWRARJUhwQXnY03SXbOJmd4fh-2FMf2fOpasllheBrYb-2F8tnjtjNDujBrG4uugreK5OWkDI227pG8YPlYGd-2Boz0WRezRdoSQJc-2FP-2FpAltWiLE9pScP81GIyVR1BztpaUmvq4E4zMoLikDKB7qk7SlL1-2FSGTuq0Bu0R3sCFv0AlEvmdDd75oyZbY7RlObuKy8esCENzQALhVZozv7LMFYFbh6FoAftC2xff7B2RF1o4DyYa8Yk0qnye3e4M7f-2FLTDmb41Sre88XiBBVGOfI8xGJkG97-2FD0XhYt4wg6fI0ygMcU4RnkuCvJp-2FGmWHgxvA8ix-2B09NZaMuyjMcnGo-2FFsPDtVZB0niWZpguf-2FSbdPRwWfez&data=05%7C01%7Ccmilligan%40aha.org%7Ce2604527eb3f4875ea0a08da552477fc%7Cb9119340beb74e5e84b23cc18f7b36a6%7C0%7C0%7C637915912395382238%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=jDbJ5gw8UdYtaVoma4Dn5DzDDHMI494FNLdQQh">www.aha.org</a>. </p><div id="ftn1"> </div></div></div><div class="col-md-4"><a href="/system/files/media/file/2025/02/aha-commissioned-report-challenges-inappropriate-conclusions-regarding-long-term-care-hospitals.pdf"><img src="/sites/default/files/inline-images/cover-aha-commissioned-report-challenges-inappropriate-conclusions-regarding-long-term-care-hospitals.png" data-entity-uuid="4a657bb1-635e-42a4-be73-743de1a4db5d" data-entity-type="file" alt="Cover Image of AHA Commissioned Report" width="682" height="882"></a></div></div></div> Fri, 14 Feb 2025 14:15:03 -0600 Guides/Reports /ahas-2025-2027-strategic-plan <div class="container"><div class="row"><div class="col-md-8"><h2 class="body-h2"><span>A Message on AHA’s 2025-2027 Strategic Plan</span></h2><p class="body-paragraph">Thank you for sharing what matters most to you throughout 2024. We gathered feedback from more than 1,000 hospital and health system leaders, including members of AHA’s Regional Policy Boards and Committees, State, Regional and Metropolitan Hospital Associations, and other key membership groups.</p><p class="body-paragraph">The result is our 2025-2027 Strategic Plan, which the AHA Board of Trustees approved in November. This plan will help you tackle the top issues of today and propel us to a future where all individuals reach their highest potential for health.</p><p class="body-paragraph">The plan is rooted in four core disciplines — advocacy and representation, thought leadership, knowledge exchange and agents of change — which define AHA’s approach to providing value to members and advancing our field’s goals. It also includes nine principles that serve as the foundation for what we believe the health care system should be and strategies to help us make progress on our mission of advancing health in America.</p><p class="body-paragraph">While we know our health care system faces a number of significant challenges, we also know that we have many opportunities to build a healthier future for our patients and communities. The AHA is proud to support our nation’s hospitals and health systems as you provide 24/7 life-saving care to all patients and lead innovative efforts to advance well-being.</p><p class="body-paragraph">We encourage you to review the details — and related resources available on our webpage — and use them within your own organization as together we chart the course for the future.</p><p class="body-paragraph">You are central to our national health and health care. The AHA is incredibly proud to represent and serve you. We look forward to working together this year and in the future as we continue to advance health in America.</p><div class="row"><div class="col-sm-6"><p><strong>Tina Freese Decker</strong><br>AHA Board Chair</p></div><div class="col-sm-6"><p><strong>Rick Pollack</strong><br>AHA President and CEO</p></div></div><hr></div><div class="col-md-4"> img.STMaxwidth { width:100%; display: block; margin: auto; max-width: 360px; } <p><a href="/system/files/media/file/2025/01/2025-AHA-Strategic-Plan-20250106.pdf" target="_blank" title="Click here to download the ���������� Association 2025-2027 Strategic Plan PDF."><img class="STMaxwidth" src="/sites/default/files/inline-images/Page-1-2025-2027-AHA-Strategic-Plan-20250106.png" data-entity-uuid="f6ad3ba7-22d6-4b37-b12d-e1b205477bab" data-entity-type="file" alt="���������� Association 2025-2027 Strategic Plan page 1." width="695" height="900"></a></p><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/01/2025-AHA-Strategic-Plan-20250106.pdf" target="_blank" title="Click here to download the ���������� Association 2025-2027 Strategic Plan PDF.">Download the AHA 2025-2027 Strategic Plan PDF</a></div></div></div></div> p.body-paragraph { font-size: 16px; margin: 0 0 10px; } h2.body-h2 { font-size: 2em; margin-top: 20px; margin-bottom: 10px; Thu, 09 Jan 2025 10:00:00 -0600 Guides/Reports /environmentalscan/2024 <div> </div><div><div>.body p, .body li { font-size: 16px; } .scanLand { margin-bottom: 30px } .scanLand img { float: right; width: 50%; max-width: 300px; margin-left: 20px; border: 1px solid lightgrey } .scanLand h3 { font-size: 2em; margin-top: 0; margin-bottom: 20px } .col-md-4.scanLandForm { text-align: center } .scanLandForm { padding: 20px 20px 30px 20px; margin: 0 auto; background-color: #f6f6f6; max-width: 360px" } .scanLandForm h4 { margin-top: 0; text-align: center } .scanLandCallouts { margin: 30px auto; text-align: center } @media only screen and (max-width: 992px) { .scanLandCallouts { width: calc(50% - 20px); float: left; } .scanLandCallouts:nth-child(even) { margin-right: 30px; } .col-md-4 .scanLandForm { max-width: 360px; } } @media only screen and (max-width: 500px) { .scanLandCallouts { width: 100%; margin: 30px auto 0; } } @media only screen and (max-width: 500px) { .scanLand img { width: 100%; margin: 0 auto 30px; float: none } .mktoButtonRow { margin-left: -20px !important; } @media only screen and (max-width: 350px) { margin-left: -60px !important; } } </div><div class="container"><div class="row"><div class="col-md-8 scanLand"><img src="/sites/default/files/2023-11/Environmental-Scan-2024-cover_700x906.jpg" alt="2024 Environmental Scan cover" width="700" height="906"><h3>Implications for the coming year and beyond</h3><p>The 2024 AHA Environmental Scan explores current data and trends to help the health care field think strategically about the future, while also providing an opportunity to reflect on the changes, challenges and opportunities we’ve experienced over the past few years. This annual publication can spark discussion and engagement with hospital and health system staff, leaders, boards and community stakeholders.</p><p><strong>Topics include:</strong></p><ul><li><strong>Hospital and health system landscape:</strong> Financial and operational challenges and care in alternative settings.</li><li><strong>Workforce:</strong> Shortages, resiliency and technology to enhance the workforce experience.</li><li><strong>Better care and greater value:</strong> Patient safety culture and risks, value-based care and emerging care delivery transformation models.</li><li><strong>Consumerism:</strong> Retail clinic trends, digital tools and “infodemic” management strategies.</li><li><strong>Trend snapshots:</strong> Public trust, coverage, artificial intelligence and climate’s impact on health.</li></ul><p><em>The 2024 Environmental Scan is sponsored by </em><a href="https://www.amnhealthcare.com/healthcare-staffing-services/?utm_source=thirdpartywebsite&utm_medium=Content&utm_campaign=ClientAMN_AHAEnvironmentalScan_2024&LO=AHA.com" title="AMN Healthcare | Innovative Staffing and Workforce Solutions"><em>AMN Healthcare Leadership Solutions</em></a></p><h4><small>Also Available:</small></h4><p>The 2024 Environmental Scan <a href="/system/files/media/file/2023/12/Environmental_Scan_2024-Leadership-Discussion-Guide.pdf" target="_blank" title="Leadership Discussion Guide"><strong>Leadership Discussion Guide</strong></a> helps hospitals and other stakeholders use the scan to strategize and think about key issues.</p><p>An <em>AHA member-only</em> <a href="/presentation-resource/2023-11-28-2024-environmental-scan-presentation" target="_blank" title="Members Only - PowerPoint presentation"><strong>PowerPoint presentation</strong></a> is designed to help share 2024 Environmental Scan insights with various stakeholders and your community.</p><p>The <a href="/aha-workforce-scan" target="_blank"><strong>2024 AHA Health Care Workforce Scan</strong></a> will help you better understand the latest forces and trends affecting health care human resources. This resource provides workforce insights to guide your organization forward during this time of continued transformation.</p><p>The AHA’s Society for Health Care Strategy & Market Development (SHSMD) offers a deep dive into key forces that are transforming the future of health care through <a href="https://www.shsmd.org/futurescan" target="_blank">Futurescan</a>.</p></div><div class="col-md-4"> <h4>Fill out the form below to get your copy today!</h4>   MktoForms2.loadForm("//sponsors.aha.org", "710-ZLL-651", 2879);</div>--><div class="panel panel-default"><div class="panel-heading"><h3>Environmental Scan</h3></div><div class="panel-body"><p><a class="btn btn-wide btn-primary" href="/environmentalscan" rel="noopener noreferrer nofollow" data-view-context="top-level-view">Latest Edition</a></p></div></div><div class="scanLandCallouts"><a href="/center/emerging-issues/market-insights"><small><img src="/sites/default/files/2019-11/Market_Insights_Call_Out_340X104_0.jpg" alt="market insights callout" width="360" height="104"></small></a></div><div class="scanLandCallouts"><a href="/center/form/innovation-subscription"><small><img src="/sites/default/files/2019-11/Market_Scan_Call_Out_340X104_0.jpg" alt="market scan callout" width="360" height="104"></small></a></div></div></div></div></div> Tue, 03 Dec 2024 10:00:00 -0600 Guides/Reports <div class="raw-html-embed"> </div><div><div> .body p, .body li { font-size: 16px; } .scanLand { margin-bottom: 30px } .scanLand img { float: right; width: 50%; max-width: 300px; margin-left: 20px; border: 1px solid lightgrey } .scanLand h3 { font-size: 2em; margin-top: 0; margin-bottom: 20px } .col-md-4.scanLandForm { text-align: center } .scanLandForm { padding: 20px 20px 30px 20px; margin: 0 auto; background-color: #f6f6f6; max-width: 360px" } .scanLandForm h4 { margin-top: 0; text-align: center } .scanLandCallouts { margin: 30px auto; text-align: center } @media only screen and (max-width: 992px) { .scanLandCallouts { width: calc(50% - 20px); float: left; } .scanLandCallouts:nth-child(even) { margin-right: 30px; } .col-md-4 .scanLandForm { max-width: 360px; } } @media only screen and (max-width: 500px) { .scanLandCallouts { width: 100%; margin: 30px auto 0; } } @media only screen and (max-width: 500px) { .scanLand img { width: 100%; margin: 0 auto 30px; float: none } .mktoButtonRow { margin-left: -20px !important; } @media only screen and (max-width: 350px) { margin-left: -60px !important; } } </div><div class="container"><div class="row"><div class="col-md-8 scanLand"><img src="/sites/default/files/2024-12/Environmental-Scan-v2-2025-cover_700x906.jpg" alt="2025 Environmental Scan cover" width="700" height="906"><h3>Implications for the coming year and beyond</h3><p>The 2025 AHA Environmental Scan offers invaluable insights into the latest data and emerging trends, empowering the health care field to plan strategically for the future. The scan gives us the chance to reflect on the challenges we face and the opportunities that await us. By understanding where we are, we can more clearly see where we can go and why it matters. This annual publication serves as a catalyst for meaningful conversations among hospital and health system leaders, boards, staff and community stakeholders as we collectively shape the future of health care.</p><p><strong>Topics include:</strong></p><ul><li><strong>Hospital and health system landscape:</strong> Financial challenges, supply chain shortages, cybersecurity and the impact of commercial insurer claim denials.</li><li><strong>Workforce:</strong> Vacancy rates, remote work trends and technology advancements.</li><li><strong>Better care and greater value:</strong> Improvements in patient safety and quality measures, value-based payment models, strategies to address social needs and maternal health.</li><li><strong>Consumerism:</strong> The impact of GLP-1 drugs, consumers’ views on GenAI, digital patient engagement and health care affordability.</li><li><strong>Trend snapshots:</strong> Public trust, aging in the U.S., coverage, behavioral health, rural health, climate’s impact on health, hospital-based violence intervention programs and vaccines.</li></ul><p><em>The 2025 Environmental Scan is sponsored by </em><a href="https://www.besmith.com" title="B.E. Smith, an AMN Healthcare"><em>B.E. Smith, an AMN Healthcare company.</em></a></p><h4><small>Also Available:</small></h4><p>The 2025 Environmental Scan <a href="/system/files/media/file/2024/11/2025_Environmental_Scan_Leadership_Guide.pdf" target="_blank" title="Leadership Discussion Guide"><strong>Leadership Discussion Guide</strong></a> helps hospitals and other stakeholders use the scan to strategize and think about key issues.</p><p>An <em>AHA member-only</em> <a href="/presentation-resource/2024-11-26-2025-environmental-scan-presentation" target="_blank" title="Members Only - PowerPoint presentation"><strong>PowerPoint presentation</strong></a> is designed to help share 2025 Environmental Scan insights with various stakeholders and your community.</p><p>The <a href="/aha-workforce-scan" target="_blank"><strong>2025 AHA Health Care Workforce Scan</strong></a> will help you better understand the latest forces and trends affecting health care human resources. This resource provides workforce insights to guide your organization forward during this time of continued transformation.</p><p>The AHA’s Society for Health Care Strategy & Market Development (SHSMD) offers a deep dive into key forces that are transforming the future of health care through <a href="https://www.shsmd.org/futurescan" target="_blank"><strong>Futurescan</strong></a>.</p></div><div class="col-md-4"><div class="scanLandForm"><h4>Fill out the form below to get your copy today!</h4>   MktoForms2.loadForm("//sponsors.aha.org", "710-ZLL-651", 4277); </div><div class="scanLandCallouts"><a href="/center/emerging-issues/market-insights"><small><img src="/sites/default/files/2019-11/Market_Insights_Call_Out_340X104_0.jpg" alt="market insights callout" width="360" height="104"></small></a></div><div class="scanLandCallouts"><a href="/center/form/innovation-subscription"><small><img src="/sites/default/files/2019-11/Market_Scan_Call_Out_340X104_0.jpg" alt="market scan callout" width="360" height="104"></small></a></div></div></div></div></div> Tue, 03 Dec 2024 10:00:00 -0600 Guides/Reports