At Advis, over the past 40 years, we’ve partnered with healthcare organizations through some of the industry’s most challenging periods. As the healthcare landscape enters another era of uncertaintly our commitent remains steadfast. We strive to support our clients through times of change and complexity.
The American Hospital Association (“AHA”) recently published a report highlighting the challenges hospitals are facing in 2025.
The AHA’s report outlines many of the obstacles facing healthcare providers this year, including:
- Hospital expenses have surged and remain elevated
- Labor costs dominate hospital expenses
- Medicare and Medicaid reimbursements are not enough to cover the cost of care
- Hospital expenses are growing faster than inflation
- Higher utilization and acuity of chronic disease patients
- Growing impact of Medicare Advantage on hospital finances
- Observation stays are increasing in duration
- Longer stays for MA patients resulting in lower reimbursement
- Higher claim denials
- Discharge delays, prior authorization inefficiencies, and lack of in-network post-acute venues
- Lower reimbursement and increasing administrative burden
- Impact of tariffs on hospital costs
- While domestic supplies are part of the mix, hospitals rely heavily on international sources or manufacturers
- Drug and supply shortages will occur more often—90% of supply chain professionals are expecting procurement disruptions
- Costs for hospitals will increase significantly
So what steps should healthcare organizations consider?
Hospital leaders are keenly aware of what’s at stake. As leaders face these challenges, it is time to also brace themselves for what is to come. If hospitals have not already taken steps to position themselves strongly in the face of current challenges, the time to act is now. It is time to assess risks, reinforce operations, and make sure your organization is ready to face the uncertain road ahead. In other words, batten down the hatches! Because safeguarding healthcare access is critical.
Stay tuned for ongoing insights and strategies to help you navigate these challenging times.
As new challenges emerge, Advis is here to assist you in developing a strong yet flexible, easily adaptable strategy to better position your hospital in these uncertain times. Whether it’s devising new strategies to cope with new problems or developing a comprehensive review of hospital operations to uncover new efficiencies, or identifying new revenue streams, Advis wants to help. Our track record of cost-effective expert consultancy is recognized industry wide. Please contact your Advis consultant directly or mhon@advis.com for more information.
Published May 5, 2025
