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New AHA Report Predicts a Dire Financial Picture for Hospitals

Updated: May 26

A new AHA report finds that during 2021-2023, hospital costs grew 12.4%, more than two times faster than Medicare reimbursement at 5.2%. Hospital days cash on hand declined by 28.2% since 2022. In 2022, Medicare paid hospitals only 82% of their costs. Medicaid varies by state but traditionally pays between 50-60% of hospital costs. These two government payers constitute 70-80% of hospital patients.

While these facts depict a dire financial picture for hospitals, the future will be worse. Between government debt levels and the rapid aging of America, government funding can only get worse. The AHA’s solutions to raise current reimbursement are unrealistic. Taxpayers cannot afford more healthcare spending.

The solution is a radically new payment model that is simple to administer and rewards the right behaviors. AHA advocacy is missing the real opportunity. Healthcare payment reform is the topic of my upcoming presentation at Marcus Evans’ Healthcare CEO and Executive Strategy Summit, taking place May 20-21 in Westlake Village, CA.

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