AHA raises the alarm on rising hospital costs

A recent report from the American Hospital Association (AHA) warns that rising operational costs, insufficient reimbursements, and potential policy changes are creating a financial crisis for U.S. hospitals. In 2023 alone, hospitals faced $130 billion in underpayments from Medicare and Medicaid, with the gap increasing 14% annually since 2019. Hospitals are also burdened by high labor and supply costs, with staffing expenses now making up over half of total costs. Tariffs on imported medical goods, including essential devices and drugs from China and India, could worsen shortages and increase expenses. Nearly 70% of medical devices and 30% of pharmaceutical ingredients are imported. Medicare Advantage plans are another challenge, with hospitals reporting an 8.8% drop in reimbursements and longer patient stays due to prior authorization delays. The AHA warns that these pressures could seriously hinder hospitals’ ability to deliver prompt, quality care to their communities across the country.

05-05-2025