/ en Tue, 29 Apr 2025 21:25:25 -0500 Wed, 30 Apr 25 06:00:00 -0500 /cybersecurity-government-intelligence-reports/2022-12-13-tlp-white-nsa-apt5-citrix-adc-threat-hunting-guidance-december-2022 <h2>Executive summary</h2><p>APT5 has demonstrated capabilities against Citrix® Application Delivery Controller™ (ADC™) deployments (“Citrix ADCs”). Targeting Citrix ADCs can facilitate illegitimate access to targeted organizations by bypassing normal authentication controls. As such, NSA, in collaboration with partners, has developed this threat hunting guidance to provide steps organizations can take to look for possible artifacts of this type of activity. Please note that this guidance does not represent all techniques, tactics, or procedures (TTPs) the actors may use when targeting these environments. This activity has been attributed to APT5, also known as UNC2630 and MANGANESE.</p><h2>Introduction</h2><p>NSA recommends organizations hosting Citrix ADC environments take the following steps as part of their investigation. Treat these detection mechanisms as independent ways of identifying potentially malicious activity on impacted systems. Artifacts may vary based on the environment and the stage of that activity. As such, NSA recommends investigating any positive result even if other detections return no findings.</p> Tue, 13 Dec 2022 11:06:06 -0600 Public /2017-12-15-aha-today <div class="container"> <div class="row"> <div class="col-md-8"><img alt="AHA Today News logo" class="align-center" src="/sites/default/files/2023-02/aha-today-logo-900.jpg" /> <p>Thank you for your interest in AHA Today, the ���������� Association’s six-day-a-week email newsletter. Each weekday you’ll get the day’s top news stories, with the context and analysis that hospital and health systems leaders need to lead their organization. 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However, these communities and their hospitals face many challenges. As the hospital field engages in its most significant transformation to date, many are fighting to survive – potentially leaving their communities at risk for losing access to health care services. Recognizing these challenges and the need for new integrated and comprehensive health care delivery and payment strategies, the AHA Board of Trustees created the Task Force on Ensuring Access in Vulnerable Communities. Comprised of 29 hospital and health system leaders and state hospital association CEOs, the task force held meetings, heard from policymakers and conducted field hearings to speak with hospital and community leaders during a 15-month period.<br><br>The Task Force work is ongoing. This webpage is just one of the many ways AHA will keep you connected to the latest developments and resources as we address the critical issue of ensuring access to health care services.</p><hr><h2><span class="color_aha_blue"><strong>Task Force Report</strong></span></h2><p>The task force report outlines nine emerging strategies that can help preserve access to health care services in vulnerable communities. These strategies will not apply to or work for every community and each community has the option to choose one or more that are compatible with its needs.</p><ul><li><a href="/system/files/content/16/ensuring-access-taskforce-exec-summary.pdf" target="_blank">Executive Summary</a><a href="/system/files/content/16/ensuring-access-taskforce-report.pdf"></a></li><li><a href="/system/files/content/16/ensuring-access-taskforce-report.pdf">Full Report</a></li><li><a href="https://www.youtube.com/watch?v=v2TgJDL9O6o">Release Video</a></li><li><a href="/system/files/content/16/taskforce-charts-rural.pdf">Rural Chart Pack</a></li><li><a href="/system/files/content/16/taskforce-charts-urban.pdf">Urban Chart Pack</a></li></ul><hr><h2><strong class="color_aha_blue">Inpatient/Outpatient Transformation Strategy</strong></h2><ul><li><a href="/system/files/2018-02/inpatient-outpatient-transformation-strategy.pdf">Emerging Strategies to Ensure Access to Health Care Services – Inpatient/Outpatient Transformation</a></li></ul><hr><h2><strong class="color_aha_blue">Social Determinants of Health Strategy</strong></h2><ul><li><a href="/system/files/2018-02/social-determinants-health.pdf">Emerging Strategies to Ensure Access to Health Care Services - Social Determinants</a></li><li><a href="http://www.hpoe.org/Reports-HPOE/2017/AHA-community-health-initiatives.pdf">Community Health Initiatives at the ���������� Association</a></li><li><a href="http://www.hpoe.org/Reports-HPOE/2017/determinants-health-food-insecurity-role-of-hospitals.pdf">AHA Social Determinants of Health Series - Food Insecurity and the Role of Hospital</a></li><li><a href="http://www.hpoe.org/resources/ahahret-guides/3063">AHA Social Determinants of Health Series - Housing and the Role of Hospitals</a></li></ul><hr><h2><strong class="color_aha_blue">Virtual Care Strategies</strong></h2><ul><li><a href="/system/files/content/17/task-force-virtual-care-strategies.pdf" target="_blank">Emerging Strategies to Ensure Access to Health Care Services – Virtual Care Strategies</a></li><li><a href="/system/files/content/17/telehealth-case-examples.pdf">Telehealth — Delivering the Right Care, at the Right Place, at the Right Time: Case Examples of AHA Members in Action</a></li></ul><hr><h2><strong class="color_aha_blue">Emergency Medical Center Strategy</strong></h2><ul><li><a href="/system/files/2018-06/task-force-emergency-medical-center.pdf" target="_blank">Emerging Strategies to Ensure Access to Health Care Services – Emergency Medical Center</a></li><li><a href="/system/files/2018-05/emergency-medical-center-strategy-5-2018-jk.pdf">Comparison: Federal Policy Solutions to Ensure Access to Emergency Services</a></li><li><a href="/2018-05-07-overview-rural-emergency-medical-center-act">The Rural Emergency Medical Center Act of 2018</a></li><li><a href="/letter/2018-05-08-aha-rep-ron-kind-support-rural-emergency-medical-center-act-2018-hr-5678">AHA Action Alert on REMC Act (members-only)</a></li><li><a href="/letter/2018-05-08-aha-rep-ron-kind-support-rural-emergency-medical-center-act-2018-hr-5678">AHA Letter of Support of the REMC Act (Kind)</a></li><li><a href="/letter/2018-05-08-aha-rep-lynn-jenkins-support-rural-emergency-medical-center-act-2018-hr-5678">AHA Letter of Support of the REMC Act (Jenkins)</a></li><li><a href="/press-releases/2018-05-07-aha-applauds-introduction-rural-emergency-medical-center-act-2018">Press Release Applauds Introduction of REMC Act</a></li><li><a href="/letter/2017-05-18-aha-expresses-support-rural-emergency-acute-care-hospital-reach-act-s-1130">AHA Letter of Support Rural Emergency Acute Care Hospital (REACH) Act, S. 1130</a></li></ul><hr><h2 class="color_aha_blue">Indian Health Services Strategy</h2><ul><li><a href="/system/files/2018-01/stategies-to-ensure-access.pdf">Emerging Strategies to Ensure Access to Health Care Services - IHS</a></li><li><a href="/letter/2017-05-26-aha-reps-walden-pallone-re-bipartisan-indian-health-service-task-force">AHA Letter of Support for IHS Task Force (Walden/Pallone)</a></li><li><a href="/letter/2017-05-26-aha-sens-mullin-ruiz-re-bipartisan-indian-health-service-task-force">AHA Letter of Support for IHS Task Force (Mullin-Ruiz)</a></li></ul><hr><h2><strong class="color_aha_blue">Urgent Care Center Strategy</strong></h2><ul><li><a href="/content/17/emerging-strategies-urgent-care-centers.pdf" target="_blank">Emerging Strategies to Ensure Access to Health Care Services – Urgent Care Centers</a></li><li><a href="/content/17/urgent-care-center-discussion-guide.pdf" target="_blank">Is the Urgent Care Center the Right Strategy for your Community</a></li></ul><hr><h2><strong class="color_aha_blue">Global Budgets</strong></h2><ul><li><a href="/system/files/media/file/2019/03/task-force-global-budget-2017.pdf">Emerging Strategies to Ensure Access – Global Budgets</a></li></ul><hr><h2><strong class="color_aha_blue">Community Conversations</strong></h2><ul><li><a href="/content/17/community-conversations-toolkit.pdf">Ensuring Access in Vulnerable Communities: Community Conversations Toolkit</a></li><li><a href="/content/17/taskforcevulncomm-discussionguide.pdf">Discussion Guide for Boards and Hospital Leadership</a></li><li><a href="http://www.hpoe.org/resources/ahahret-guides/3061">A Playbook for Fostering Hospital-Community Partnerships to Build a Culture of Health</a></li><li><a href="http://www.hpoe.org/Reports-HPOE/2016/creating-effective-hospital-community-partnerships.pdf">Creating Effective Hospital Community Partnerships to Build a Culture of Health</a></li><li><a href="http://www.healthycommunities.org/Resources/toolkit.shtml#.WYjFtITyt0y">Community Health Assessment Toolkit</a></li><li><a href="/ahahret-guides/2016-06-09-engaging-patients-and-communities-community-health-needs-assessment">Engaging Patients and Communities in the Community Health Needs Assessment Process</a></li><li><a href="http://hospitalsocialmedia.tumblr.com/">A Hospital Leadership Guide to Digital and Social Media</a></li><li><a href="/advancing-health-in-america">Advancing Health in America</a></li><li><a href="/ahahret-guides/2013-01-01-engaging-health-care-users-framework-healthy-individuals-and-communities">AHA Framework for Engaging Health Care Users</a></li><li><a href="/ahahret-guides/2015-01-28-leadership-toolkit-redefining-h-engaging-trustees-and-communities">Leadership Toolkit for Redefining the H: Engaging Trustees and Communities</a></li><li><a href="/system/files/2018-02/leadership-role-nonprofit-health-systems.pdf">The Leadership Role of Nonprofit Health Systems in Improving Community Health</a></li><li><a href="/system/files/2018-02/critical-conversations-to-changing-health-environment.pdf">Critical Conversations on the Changing Health Environment: Physician Engagement</a></li></ul><hr><h2><strong class="color_aha_blue">Frontier Health System</strong></h2><ul><li><a href="/system/files/content/17/task-force-frontier-2017.pdf">Emerging Strategies to Ensure Access — Frontier Health System</a></li></ul><hr><h2><strong class="color_aha_blue">Rural Hospital-Health Clinic Integration</strong></h2><ul><li><a href="/factsheet/2018-08-02-emerging-strategies-ensure-access-health-care-services">Emerging Strategies to Ensure Access — Rural Hospital-Health Clinic Integration</a></li></ul><hr><h2><strong class="color_aha_blue">Other Resources</strong></h2><ul><li><a href="http://www.hpoe.org/Reports-HPOE/2017/improving-care-for-high-need-high-cost-patients.pdf" target="_blank">Improving Care for High-Need, High-Cost Patients</a></li><li><a href="/data-and-insights/presentation-center/ensuring-access" target="_blank">Ensuring Access in Vulnerable Communities PowerPoint Presentation</a></li></ul></div></div><div class="col-md-4"><div class="panel module-typeC"><div class="panel-heading"><h3 class="panel-title"><a href="/case-studies/2018-02-02-hospitals-and-health-systems-ensuring-access-their-communities">Hospitals and Health Systems Ensuring Access in Their Communities: Downloadable PDF</a></h3></div><div class="panel-body"><p><a href="/case-studies/2018-02-02-hospitals-and-health-systems-ensuring-access-their-communities"><img src="/sites/default/files/inline-images/ensuring-access-case-study-comp-rural-sm_0.jpg" data-entity-uuid="32d51105-e12e-468b-8f23-e4ae7c7aa262" data-entity-type="file" alt="Hospitals and Health Systems Ensuring Access in Their Communities cover" width="319" height="413">This is a compendium of case examples of AHA members from across the country employing the nine emerging strategies recommended by the association’s Task Force on Ensuring Access in Vulnerable Communities.</a></p></div></div></div></div></div> Wed, 16 Nov 2016 00:00:00 -0600 Public /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 Public /news/blog/2025-04-29-7-tactics-successfully-driving-health-care-team-engagement <p>In today’s rapidly evolving health care landscape — where patient outcomes and safety are non-negotiable top priorities — health systems and their staff are under constant pressure to balance competing demands. On one side is the growing expectations for personalized, high-quality care, and on the other, the urgent need to support a stretched and often overwhelmed workforce. And, of course, the former depends on addressing the latter. </p><p>The ���������� Association (AHA) and Press Ganey convened leaders from seven health care systems — including chief human resource officers, chief nursing officers and chief medical officers — to discuss their experiences and successes with a range of tactics to build team engagement. Seven key tactics emerged from the conversation:</p><ol><li><strong>Articulate a clear focus and defined roadmap</strong>. The first step in creating a positive employee and physician experience is defining clear, measurable objectives — and prioritizing what’s truly core and critical. Develop a roadmap to achieve those goals, and ensure leaders understand not only the plan but also their specific role in driving it forward. When leadership is aligned and invested, the work is elevated to a strategic priority and more easily reinforced by middle management and embedded across the organization. </li><li><strong>Connect work to purpose</strong>. Health care employees are more engaged when leadership places mission, vision and values at the heart of their strategy. Aligning performance goals to a purpose reinforces the connection between the day-to-day work and the “why” behind it. When employees see how their actions contribute to fulfilling the mission, they experience greater job satisfaction, deeper commitment and a more purpose-driven culture.</li><li><strong>Establish clear behavioral standards</strong>. Accountability starts by setting clear expectations — not only around performance outcomes but also around the behavior standards that define how people interact. These standards should be tied directly to organizational values, with concrete examples of what they look like in practice. Just as important, behavior that falls short of those expectations should be addressed immediately. Tolerating behavior outside the standards gives people permission to ignore them. </li><li><strong>Visible leadership builds trus</strong>t. Trust is the bedrock of effective health care — vital to the relationships between staff and patients and equally essential among colleagues and leaders to support strong, collaborative teams. Building that trust starts with leadership. Leaders who are visible, transparent and approachable and who consistently model the behaviors that align with organizational values set the tone for the entire culture. Their example fosters openness, accountability and psychological safety that cascades throughout the organization. </li><li><strong>Establish two-way communication</strong>. Clear, consistent communication is vital for any organization — but in health care where the environment is fast-paced, and the work is high-stakes, it’s essential. Messages need to be timely, relevant and aligned with organizational priorities. But truly effective communication is two-way.  Listening to your employees and inviting their input on improvement efforts fosters trust, strengthens engagement and leads to smarter, more sustainable solutions.</li><li><strong>Create “FOMO.”</strong> In health care, strong communication and teamwork are essential — but keeping employees engaged can be a challenge. One effective tactic? Create a sense of FOMO (fear of missing out). When team meetings, communication channels and collaborative projects feel valuable, inclusive and energizing, people want to show up. Building a culture of excitement and engagement drives greater participation and fosters stronger team connections. </li><li><strong>Recognize that leadership is a skill</strong>. Effective leadership is the cornerstone of every successful organization. While some may view leadership as an innate trait, the reality is that it can be cultivated, taught and honed through intentional development. Managers at all levels need access to the right tools, training and support to grow their skills so they can lead with confidence, mentor effectively and foster collaboration. Leadership development is a strategic investment in organizational success.</li></ol><p>Health care is fundamentally a human experience — people interacting with people. That is why investing in employee experience isn’t just a nice-to-have; it’s a strategic imperative. A highly engaged workforce collaborates more effectively, drives better patient outcomes and strengthens performance across the board. When employees thrive, the entire system functions at its best.</p><p><em>Chris DeRienzo, M.D., is AHA’s senior vice president and chief physician executive, and president of AHA’s Health Research and Educational Trust. Nell Buhlman is chief administrative officer, head of strategy at Press Ganey.</em> </p><p><em>Upcoming Event: The AHA and Press Ganey at the 2025 AHA Leadership Summit in Nashville will host a pre-Summit workshop, </em><a href="https://web.cvent.com/event/05ffbe14-fab7-4ddf-89d9-93f63942d9ca/websitePage:44c2cfcd-a0ea-4f01-bbe4-16d10551d7bb?session=3b0e30b4-8c73-4f5e-bca4-9a7b28edc574&shareLink=true" target="_blank" title="The Path to Sustained Excellence in Engagement"><em>The Path to Sustained Excellence in Engagement</em></a><em>, on Sunday, July 20, from 8:30 a.m. to 12:30 p.m. This interactive workshop will explore how employee engagement drives safety, quality and the patient experience — and how aligning these efforts leads to meaningful, sustained improvement. Learn how top-performing organizations gather feedback, integrate data and take targeted action. Attendees will also have the opportunity to share challenges, successes and strategies for advancing performance. Registration is open. </em><br> </p> Tue, 29 Apr 2025 14:17:33 -0500 Public /role-hospitals-university-vermont-medical-center-innovative-procedure-game-changer-older-adults-heart-valve-disease <div class="container"><div class="row"><div class="col-md-9"><div class="col-md-6"><p><img src="/sites/default/files/2025-04/THS-UVM-hazel-winter-700x532.jpg" data-entity-uuid data-entity-type="file" alt="Hazel Winter, 82, underwent the tricuspid transcatheter edge-to-edge repair (TEER) procedure at UVM Medical Center" width="700" height="532"></p><p><em>Hazel Winter (Photo Courtesy of UVM Medical Center)</em></p></div><p>An innovative, minimally invasive procedure is reducing the risk faced by patients with heart valve disease and improving their quality of life. During the tricuspid transcatheter edge-to-edge repair (TEER) procedure, surgeons use a clip to repair a leaky heart valve. The University of Vermont Medical Center in Burlington is currently the only hospital in the state that offers TEER and among the most experienced performing the procedure among health systems in the region.</p><p>Heart valve disease — which occurs when at least one heart valve isn’t working properly — affects more than 5 million people in the U.S., according to the <a href="https://www.cdc.gov/heart-disease/php/data-research/heart-valve-disease-toolkit/index.html" target="_blank">Centers for Disease Control and Prevention</a>. Symptoms include fatigue, swelling in the legs, shortness of breath and irregular heart rhythms. Older adults in particular are at risk for this condition, which can lead to heart failure.</p><p>A blog on the UVM Health website, “<a href="https://www.uvmhealth.org/healthsource/wheelchair-walking" target="_blank">From Wheelchair to Walking</a>,” features the story of Hazel Winter, 82, who had a minor stroke and was being treated at the UVM Medical Center emergency department, where clinicians discovered she had tricuspid valve regurgitation, a condition where the valve allows blood to leak backward into the heart.</p><p>Winter was one of the first patients in the region to undergo TEER. Before this procedure was developed, the only options for patients were undergoing open-heart surgery or living with a condition that significantly reduces their quality of life. Winter marveled at how much better she felt after the procedure: “I arrived by wheelchair, and I’m planning on walking out of here …. I can’t believe the difference this had made for me already. It’s a game changer.”</p><p>Rony Lahoud, M.D., interventional cardiologist at UVM Medical Center, observed, “To watch people go home the very next day and immediately feel the difference — that’s the kind of outcome you aspire to have.” He lauded the medical center’s multidisciplinary teamwork to develop this innovative treatment: “Pushing the boundaries of what is possible requires true collaboration between different specialties, including interventional cardiology, advanced cardiac imaging, cardiac anesthesia and cardiothoracic surgery, among others.”</p><p><a class="btn btn-primary" href="https://www.uvmhealth.org/healthsource/wheelchair-walking" target="_blank">LEARN MORE</a></p></div><div class="col-md-3"><div><h4>Resources on the Role of Hospitals</h4><ul><li><a href="/topics/innovation">Innovation, Research and Quality Improvement</a></li><li><a href="/roleofhospitals">All Case Studies</a></li></ul></div></div></div></div> Tue, 29 Apr 2025 14:14:07 -0500 Public /lettercomment/2025-04-29-aha-letter-congressional-leadership-potential-medicaid-eptc-policy-changes <p>April 29, 2025</p><table><tbody><tr><td>The Honorable John Thune<br>Majority Leader<br>U.S. Senate<br>Washington, DC 20510</td><td>The Honorable Mike Johnson<br>Speaker<br>U.S. House of Representatives<br>Washington, DC 20515</td></tr><tr><td>The Honorable Charles E. Schumer<br>Democratic Leader<br>U.S. Senate<br>Washington, DC 20510</td><td>The Honorable Hakeem S. Jeffries<br>Democratic Leader<br>U.S. House of Representatives<br>Washington, DC 20515</td></tr></tbody></table><p>Dear Leader Thune, Speaker Johnson, Leader Schumer and Leader Jeffries:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, and 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, the ���������� Association (AHA) writes to express support for the Medicaid program as the reconciliation package is developed.<strong> We urge Congress to refrain from considering disruptive policy changes to Medicaid and other health care coverage that could impact access to health care for tens of millions of Americans.</strong></p><p>The Medicaid program provides health care coverage to a variety of individuals, including children, pregnant women, the elderly and disabled, veterans and working families. Federal support for the Medicaid program ensures that patients and communities can continue to access critical health care from hospitals, physicians, behavioral health care providers, long-term care facilities and many other caregivers.</p><p>For example:</p><ul><li>Medicaid pays for approximately 41% of births nationally and 47% in rural areas<sup>.1</sup></li><li>Medicaid is especially critical for children; it covers nearly half of all children with special health care needs, and about 1 in 3 children diagnosed with cancer.<sup>2, 3</sup></li><li>Medicaid also covers more than 1 in 3, or nearly 15 million, individuals with a disability<sup>.4</sup></li><li>Most working age adults on Medicaid are employed but in lower-wage jobs that do not provide affordable health care benefits.<sup>5</sup></li><li>Medicaid is the nation’s largest payer of mental health and substance use condition services, ensuring patients have access to necessary services.<sup>6</sup></li><li>Medicaid covers five in eight nursing home residents.<sup>7</sup></li><li>More than 16 million Medicaid enrollees live in rural areas.<sup>8</sup></li></ul><p>As part of the reconciliation process, Senate and House committees of jurisdiction may be considering harmful reductions to federal Medicaid spending. These include changing the underlying finance structure to a per capita cap, reducing the federal medical assistance percentage (FMAP) for certain states and placing new limits on provider taxes. Any of these changes would negatively impact state financing for their Medicaid programs, which in turn would harm hospitals and Medicaid beneficiaries. Should states see reductions in federal support for their Medicaid programs, it could force them to further reduce provider payments to account for these losses. It is important to note that the Medicaid program consistently underpays hospitals for the care provided to its patients, even with additional expenditures made by states to adjust for low base payment rates. Nationally, the Medicaid shortfall — the difference between the hospital's cost of serving Medicaid patients and the payments it receives for services — was $27.5 billion in 2023.</p><p>Additionally, other policies congressional committees may consider could include those that could result in the displacement of Medicaid coverage for millions of beneficiaries and could lead to additional uncompensated care for our facilities. The combination of reduced provider payments and increased uncompensated care could force hospitals to make difficult decisions about reducing staffing and service lines and whether they will be able to remain open and continue to serve Medicaid beneficiaries as well as the wider community.<br>The AHA urges Congress to consider the full impact these Medicaid proposals would have on all Americans and communities, including the hospitals, health systems and other care providers that serve them, before moving forward with these significant policy changes.</p><p>In addition to being aware of the potential for harmful changes to the Medicaid program, we ask Congress to address before the end of this year the expiration of the enhanced premium tax credits (EPTCs). If these provisions fully expired, the impact would be a reduction to hospitals of $28 billion over 10 years. Congress must consider the totality of the impact of the Medicaid changes and the EPTC expiration on the financial stability on hospitals and their ability to operate and provide essential services.</p><p>We appreciate your leadership and look forward to working together to ensure that Americans continue to have access to quality health care.</p><p>Sincerely,<br>/s/<br>Richard J. Pollack<br>President & Chief Executive Officer</p><p>__________</p><p><sup>1</sup> AHA analysis of WONDER data published by the Centers for Disease Control and Prevention, available at <a href="http://wonder.cdc.gov/" target="_blank" title="Wonder Data Website">http://wonder.cdc.gov</a>.<br><sup>2</sup><a href="https://www.kff.org/medicaid/issue-brief/children-with-special-health-care-needs-coverage-affordability-and-hcbs-access/" target="_blank" title="KFF.org Medicaid Issue Brief - Children with special health care needs coverage affordability and HCBS Access"> https://www.kff.org/medicaid/issue-brief/children-with-special-health-care-needs-coverage-affordability-and-hcbs-access/</a><br><sup>3</sup><a href="https://www.sciencedirect.com/science/article/abs/pii/S0006497123089929" target="_blank" title="Science Direct Website">https://www.sciencedirect.com/science/article/abs/pii/S0006497123089929</a> <br><sup>4 </sup><a href="https://www.kff.org/medicaid/issue-brief/5-key-facts-about-medicaid-coverage-for-people-with-disabilities/" target="_blank" title="KFF Medicaid Issue Brief - 5 Key facts about Medicaid Coverage for people with Disabilities">https://www.kff.org/medicaid/issue-brief/5-key-facts-about-medicaid-coverage-for-people-with-disabilities/</a><br><sup>5</sup> <a href="https://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work-an-update/" target="_blank" title="KFF Medicaid Issues Brief- Understanding the intersection of Medicaid and work an updated">https://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work-an-update/</a><br><sup>6 </sup><a href="https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/index.html" target="_blank" title="Medicaid Benefits, Behavioral health services index">https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/index.html</a><br><sup>7 </sup><a href="https://www.kff.org/other/state-indicator/distribution-of-certified-nursing-facilities-by-primary-payer-source/" target="_blank" title="KFF Other state indicator distribution of certified nursing facilities by primary payer source">https://www.kff.org/other/state-indicator/distribution-of-certified-nursing-facilities-by-primary-payer-source/</a><br><sup>8 </sup><a href="https://www.kff.org/other/state-indicator/medicaid-enrollees-by-urban-rural-status/?dataView=1&currentTimeframe=0&selectedDistributions=rural&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D" target="_blank" title="KFF Other state indicator Medicaid enrollees by urban rural status">https://www.kff.org/other/state-indicator/medicaid-enrollees-by-urban-rural-status/?dataView=1&currentTimeframe=0&selectedDistributions=rural&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D</a></p><p> </p> Tue, 29 Apr 2025 12:24:42 -0500 Public /aha-center-health-innovation-market-scan/2025-04-29-4-key-takeaways-evolving-nurse-care-models <div class="container"><div class="row"><div class="col-md-8"><p><img src="/sites/default/files/inline-images/4-Key-Takeaways-on-Evolving-Nurse-Care-Models.png" data-entity-uuid="0bd83292-0524-47c1-b393-cca932532cb1" data-entity-type="file" alt="4 Key Takeaways on Evolving Nurse Care Models. Nursing Leadership Insight Study: Navigating Evolving Challenges and Opportunities in a Complex Health Care Landscape. Download the report." width="900" height="508"></p><p>As hospitals and health systems redesign care to improve efficiency, optimize workforce deployment and improve outcomes, interesting trends are developing among nursing leaders.</p><p>Virtual care (32%), including telehealth, virtual nursing and patient monitoring, remains a top focus, reflecting its growing role in care delivery, notes the AHA’s American Organization for Nursing Leadership’s (AONL) <a href="https://www.aonl.org/resources/nursing-leadership-survey" target="_blank" title="AONL: Nursing Leadership Insight Study">“Nursing Leadership Insight Study”</a> released last month. Interdisciplinary collaboration (30%), upskilling leaders (21%) and team-based models of care (21%) highlight the role of teamwork and leadership development in improving patient outcomes.</p><h2>Redesign Care to Improve Efficiency</h2><p>Significant differences exist in care redesign priorities, according to data and analyses in the AONL study. The findings include:</p><ul><li><strong>Nurse managers</strong> prioritized interdisciplinary collaboration and workforce well-being tools, with strong statistical evidence supporting this focus. They placed less emphasis on upskilling leaders and ensuring that work is performed at the top of the licensure scope of practice.</li><li><strong>Chief nursing officers (CNOs) and chief nursing executives (CNEs)</strong> prioritized upskilling leaders and advocacy for policy change, focusing on strengthening leadership capacity and driving systemic improvements. They placed less emphasis on interdisciplinary collaboration and workforce well-being, the key focus areas for managers.</li><li><strong>Directors,</strong> positioned between managers and CNOs/CNEs, indicated a slight emphasis on workforce well-being tools, aligning partially with managers’ focus.</li></ul><h3>Key Takeaway</h3><p>Align strategies to be effective. These contrasting priorities among nurse leaders underscore the diverse approaches to care redesign and the need for alignment across leadership tiers (managers, CNOs/CNEs and directors) to achieve cohesive and effective strategies.</p><h2>Optimize Workforce Deployment</h2><p>The March 2025 AONL study assessed the effectiveness of various strategies to address staffing challenges, with respondents rating each on a scale of 1 to 5, where 5 indicates “very effective.”</p><p>The most effective strategies identified by nurse leaders were listening and responding to feedback from staff (average 3.51) and partnering with nursing schools (average 3.44). Notably, listening and responding to feedback was the only solution with a median score of 4, highlighting its unique importance among the options evaluated. The findings emphasize collaboration, responsiveness to staff needs and fostering relationships with nursing schools.</p><p>Other strategies rated above average included allowing days off when necessary (average 3.43), increasing nurse recognition (average 3.39) and increasing shared governance (average 3.35). Measures such as increasing wages or bonuses, allowing adequate time for meals and breaks and offering flexible scheduling also scored well, each with averages between 3.28 to 3.30.</p><h3>Key Takeaway</h3><p>Develop targeted strategies. Overall, these results underscore the importance of targeted, staff-focused strategies in nurse well-being and retention.</p><h2>5 Forward-Looking Care Models</h2><p>While current models have demonstrated their promise, several care models have emerged as avenues organizations can take to improve nurses’ working environments and make caring for patients more seamless, notes a recent Wolters Kluwer study, <a href="https://www.wolterskluwer.com/en/news/eight-out-of-ten-nursing-leaders-are-piloting-new-nursing-care-models-cites-wolters-kluwer-survey" target="_blank" title="Wolters Kluwer: Eight out of ten nursing leaders are piloting new nursing care models, cites Wolters Kluwer survey">“FutureCare Nursing 2025.”</a></p><p>The top five nursing care delivery models that health care organizations are planning to implement are:</p><img src="/sites/default/files/inline-images/Top-Five-Nursing-Care-Delivery-Models-That-Health-Care-Organizations-Are-Planning-to-Implement.jpg" data-entity-uuid="1983773d-e0bd-46db-91f2-6b2b22ac9a96" data-entity-type="file" alt="Home health nursing: 71%. Internal float pools: 68%. Virtual Nursing: 66%. Telehealth nursing: 66%. Multidisciplinary care: 61%. Source: Wolters Kluwer, 2025." width="597" height="212" class="align-center"><h3>Key Takeaway</h3><p>Tech will be vital to improve workflows. With these nursing models forecast to grow, new care-related technologies will be vital to enhance and improve daily workflows, particularly with home health, virtual and telehealth nursing. When asked how they will measure the success of these implementations, about half of the survey respondents highlighted the following areas as most impactful:</p><img src="/sites/default/files/inline-images/Success-Metrics-of-New-Care-Related-Technologies.jpg" data-entity-uuid="48eb6d82-a206-489c-b511-3290b6b8b528" data-entity-type="file" alt="Reduced medical errors: 51%. Optimized nurse staffing and workforce management: 50%. Improved clinical outcomes: 48%. Source: Wolters Kluwer: 2025." width="597" height="212" class="align-center"><h2>7 Nursing Roles to Be Most in Demand</h2><p>To support the rollout of new nursing care models, hospital and health system leaders will be looking for specialized skills and experience when increasing the engagement and retention of their workforce, the Wolters Kluwer report states. When polled about new roles they would look to add when implementing new care models, respondents ranked the following as the top areas:</p><ul><li><strong>Nurse informatics: </strong><span><strong>52%</strong></span></li><li><strong>Telehealth nurses: </strong><span><strong>50%</strong></span></li><li><strong>Nurse care coordinators: </strong><span><strong>50%</strong></span></li><li><strong>Nurse educators in telehealth and virtual care: </strong><span><strong>47%</strong></span></li><li><strong>Internal float pool nurses: </strong><span><strong>41%</strong></span></li><li><strong>Home health nurse coordinator: </strong><span><strong>41%</strong></span></li><li><strong>Nurse case manager: </strong><span><strong>41%</strong></span></li></ul><h3>Key Takeaway</h3><p>Encourage nurses to explore new roles. Nursing students and nurses looking to expand or change their careers should consider the growing demand for nursing roles that, in some cases, are tech-enabled, the Wolters Kluwer study states.</p></div><div class="col-md-4"><p><a href="/center" title="Visit the AHA Center for Health Innovation landing page."><img src="/sites/default/files/inline-images/logo-aha-innovation-center-color-sm.jpg" data-entity-uuid="7ade6b12-de98-4d0b-965f-a7c99d9463c5" alt="AHA Center for Health Innovation logo" width="721" height="130" data-entity- type="file" class="align-center"></a></p><p><a href="/center/form/innovation-subscription"><img src="/sites/default/files/2019-04/Market_Scan_Call_Out_360x300.png" data-entity-uuid data-entity-type alt width="360" height="300"></a></p></div></div></div>.field_featured_image { position: absolute; overflow: hidden; clip: rect(0 0 0 0); height: 1px; width: 1px; margin: -1px; padding: 0; border: 0; } .featured-image{ position: absolute; overflow: hidden; clip: rect(0 0 0 0); height: 1px; width: 1px; margin: -1px; padding: 0; border: 0; } h2 { color: #9d2235; } h3 { color: #9d2235; } Tue, 29 Apr 2025 06:15:00 -0500 Public /aha-center-health-innovation-market-scan/2025-04-29-ai-advances-reduce-burden-nurses-get-fresh-look <div class="container"><div class="row"><div class="col-md-8"><p><img src="/sites/default/files/inline-images/AI-Advances-to-Reduce-Burden-on-Nurses-Get-a-Fresh-Look.png" data-entity-uuid="12207187-a2cf-4fdd-8f6e-bb8cb6bc6429" data-entity-type="file" alt="AI Advances to Reduce Burden on Nurses Get a Fresh Look. An artificial intelligence (AI) bot and a nurse clinician share data." width="1200" height="677"></p><p>Using artificial intelligence (AI) to reduce the administrative burden on clinicians continues to gain momentum, but lately there has been an increasing focus on helping nurses in this endeavor.</p><p>Recent reports note that the electronic health record (EHR) giant Epic Systems is piloting <a href="https://www.epic.com/software/ai-clinicians/" target="_blank" title="Epic: AI for Clinicians">AI-powered documentation tools</a> to support nursing workflows and reduce administrative load. The technology suggests and pre-populates clinical data in patient records, mimicking earlier physician-focused applications.</p><p>Epic is partnering with Microsoft and <a href="https://www.abridge.com/" target="_blank" title="Abridge homepage">ambient AI vendor Abridge</a> in this effort. Epic officials believe generative AI and ambient generative AI offer nurses a new set of tools to reinvent how they work.</p><p>Nurses are testing Epic's Rover mobile app to record conversations through a smartphone, notes a <a href="https://www.modernhealthcare.com/digital-health/epic-ai-clinical-documentation-tools-nursing" target="_blank" title="Modern Healthcare: Epic pilots AI clinical documentation tools for nursing">Modern Healthcare report</a>. The AI tool puts relevant portions of a conversation into the EHR, such as a patient’s pain scores. A nurse then reviews the data in the Rover app and files them to the chart.</p><p>The technology also is being tested with Microsoft at nine health systems, including Baptist Health in Jacksonville, Florida, Mercy Hospital St. Louis and Stanford Health Care in California, the report states. Pilot participants will provide feedback to Epic to refine the tools through clinical testing and iterative feedback.</p><h2>Piloting AI in Nursing Workflows</h2><p>Elsewhere, Cedars-Sinai Medical Center earlier this year began testing an AI mobile app called <a href="https://www.aivahealth.com/aiva-nurse-assistant" target="_blank" title="Aiva Health: Aiva Nurse Assistant and the Dawn of Voice Charting">Aiva Nurse Assistant</a>. The app allows nurses to use a mobile phone to document patient information in real time through voice dictation. It transcribes the data and then — once validated by a clinician — the app files that information directly into the patient’s EHR.</p><p>Initially being tested by nurses and clinical partners on a 48-bed surgical unit, the pilot expands on similar technologies already in use by Cedars-Sinai physicians.</p><p><a href="https://health.universityofcalifornia.edu/news/writing-new-history-health-care-uc-nurses-set-vision-future-ai-nursing" target="_blank" title="University of California Health: “Writing the new history for health care”: UC nurses set a vision for the future of AI in nursing">University of California Health</a>, meanwhile, is using AI to augment clinical nurses’ practice skills and responsibilities. The health system is integrating different databases and technology systems to help make nurses’ work more efficient.</p><p>In a 12-hour shift, a nurse spends 132 minutes on average documenting patient information in the EHR system, according to Donna Wellbaum, MSN, R.N., chief nursing informatics officer at UCLA Health.</p><p>That’s about 18% of a nurse’s time per 12-hour shift and doesn’t account for other research that a nurse may need to conduct outside of the EHR to consult other databases and systems on policies, patient education, standards of care or other procedures.</p><p>Front-line nurses and nurses in management roles at UCSF both cite another key benefit that AI brings to the profession: being able to collect information from several sources and systems on a single screen to help them get what they need to help their patients.</p><p>Regardless, nurses always will need to apply clinical judgment and critical thinking in how they care for their patients. “Every AI tool necessitates the clinician to review and validate what was suggested," notes Kay Burke, R.N., vice president and chief nursing informatics officer at UCSF.</p></div><div class="col-md-4"><p><a href="/center" title="Visit the AHA Center for Health Innovation landing page."><img src="/sites/default/files/inline-images/logo-aha-innovation-center-color-sm.jpg" data-entity-uuid="7ade6b12-de98-4d0b-965f-a7c99d9463c5" alt="AHA Center for Health Innovation logo" width="721" height="130" data-entity- type="file" class="align-center"></a></p><p><a href="/center/form/innovation-subscription"><img src="/sites/default/files/2019-04/Market_Scan_Call_Out_360x300.png" data-entity-uuid data-entity-type alt width="360" height="300"></a></p></div></div></div>.field_featured_image { position: absolute; overflow: hidden; clip: rect(0 0 0 0); height: 1px; width: 1px; margin: -1px; padding: 0; border: 0; } .featured-image{ position: absolute; overflow: hidden; clip: rect(0 0 0 0); height: 1px; width: 1px; margin: -1px; padding: 0; border: 0; } h2 { color: #9d2235; } Tue, 29 Apr 2025 06:00:00 -0500 Public /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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