News: 2022 projected to be worst financial year for hospitals yet, report says

CDI Strategies - Volume 16, Issue 43

The onset of COVID-19 has brought a host of challenges for hospitals and health systems since March 2020, particularly with pressure on staff and resources. In a report by Kaufman Hall, data shows recent and projected future performance for hospitals through the rest of 2022 will continue to face financial issues. Ultimately, the report predicts United States hospitals will see billions of dollars in losses in 2022 whether under optimistic or pessimistic models, the American Hospital Association (AHA) reported.

From data representing more than 900 hospitals, key findings include:

  • The median margin remained negative the first six months of 2022, and initials result from the second half indicate this trend will continue.
  • Optimistic projections for 2022 predict margins will be down 37% from pre-pandemic levels; pessimistic projections predict a 133% decline.
  • More than half of hospitals (53%) are projected to have negative margins through 2022.
  • Expenses are projected to increase nearly $135 billion in 2022 compared to 2021, with labor expenses increasing by an estimated $86 billion and non-labor expenses by $49 billion.
  • All expense categories will likely remain 20-25% above pre-pandemic levels, with drug expenses increasing the most by $1 billion in 2022.

Other challenges, such as workforce shortages and supply disruptions, will likely contribute to hospital losses as well. Ultimately, 2022 may be the most difficult year for hospitals and health systems since the beginning of the pandemic, the report states, with no foreseeable federal support.

Editor’s note: To read the AHA’s summary of this report, click here. To read Kaufman Hall’s full report, click here.

Found in Categories: