How Are Hospitals Faring Financially in 2025?
Hospitals started 2025 with a stable financial performance driven by strong patient volumes, but rising costs for drugs, supplies, and services continue to put major pressure on margins.
What’s In Store for Hospital M&A in 2025?
This year will likely see a high rate of divesture among hospital M&A deals, according to Anu Singh, managing director at Kaufman Hall. He also predicted that health systems will continue to pursue partnerships with a broader array of organizations, such as payers and venture firms, to solve challenges.
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What Factors Have Led to Hospitals’ Relative Financial Stability in 2024?
Hospitals’ finances have been much more stable in 2024 than last year, according to a new report from Kaufman Hall. Some contributing factors include increases in patient volume and a shorter average length of stay for patients.
High Labor Costs Continue to Plague Providers, Data Shows
High labor costs remain an ongoing problem threatening providers’ bottom lines, according to new data from Kaufman Hall. The research revealed that medical groups’ median investment in each employed physician has reached more than $300,000 for the first time.
How Have Hospitals Fared Financially So Far in 2024?
Health systems' financial results suggest the start of sustained recovery, but persistent challenges remain, including rising expenses and less-than-ideal reimbursement rates from payers.
As Costs Continue to Grow, So Is the Gap Between High- and Low-Performing Hospitals
Hospital finances seem to be stabilizing overall. However, a closer look reveals there is a widening gap between the highest- and lowest-performing hospitals, according to a new Kaufman Hall report.
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Hospital M&A Activity Remained Strong In Q2, Kaufman Hall Says
The number of hospital M&A deals may have fallen from Q1 to Q2 of this year, but that doesn’t mean that the hospital M&A space is lacking vitality, according to a new Kaufman Hall report. Rather, it means that the hospital M&A is shifting its emphasis from scale to strategy.
Hospital Operating Margins Are Growing — But Not For All
Hospitals’ finances improved in April compared to both the month prior and the same time frame last year, according to a new report from Kaufman Hall. The report also noted that there is a widening gap between the highest- and lowest-performing organizations.
Q1 Was Pretty Good For Hospital Finance — But It’s Unclear If It Will Stay That Way
Hospitals’ operating margins and patient volumes dropped slightly in March. While hospitals were doing relatively well financially during the first quarter of the year, this new data could suggest more financial challenges ahead for hospitals. But right now, it’s unclear whether the recent declines in hospitals’ margins and volumes will be short- or long-term.
Hospital M&A Activity in 2024: What to Expect
Q1 2024 saw a significant rise in the number of hospital M&A deals compared to the past three Q1s. Experts believe this M&A activity will continue to climb throughout this year and next — motivated by both financial distress and hospitals’ desire to improve strategic business lines like value-based care and digital healthcare services.
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How Financial Pressures Are Shaping Hospital M&A Activity
Hospitals weathered one of their most challenging years in 2022, with median operating margins staying in the red throughout most of the year. Those money problems proved to be a major factor shaping last year’s M&A transactions — financial pressures influenced 28% of hospital M&A deals last year, up from 15% in 2022, a new report showed.
How Hospitals Can Keep Their Financial Momentum Going
The hospital sector's financial performance in November showed signs of continued stabilization and growth, according to Kaufman Hall’s latest monthly report. Hospitals should "take advantage of the relative stability and re-embrace strategic growth if they hope to see continued success in 2024," stated Erik Swanson, one of the report's authors.
Financial Pressures Drove Nearly 40% of Hospitals M&A Deals in Q3
Hospital M&A activity has been returning to pre-pandemic levels this year, according to a new report. There were 18 M&A transactions in Q3, compared to seven in Q3 2021 and 10 in Q3 of last year. The reason why M&A activity is regaining its momentum is because hospitals are seeking partnerships to grow and protect their long-term financial sustainability — the report found financial distress was the driving factor behind nearly 40% of deals announced during Q3.
Decreased Volume Variability & Declining Labor Expenses Are Helping Hospitals’ Finances Bounce Back
Hospitals’ operating margins are still in a worse place than they were before the pandemic, but 2023 is ending as a much more stable year for hospital finance than 2022, according to a new report from Kaufman Hall. Because this year hasn't had any large Covid-19 surges, hospitals have seen less variability in patient volumes. This has helped them allocate their resources more efficiently and decrease their reliance on expensive contract labor.
Debunking Healthcare’s Recession-Proof Reputation
During past recessions, the healthcare sector remained relatively immune to economic downswings — but things are different now that a sweeping labor shortage and lower patient volumes have been added to the mix.