Hospitals Confront Rising Non-Labor Costs, Workforce Pressures and Reimbursement Challenges, Kaufman Hall Reports

Hospitals and health systems are grappling with sharp increases in non-labor expenses, workforce retention issues and continued payer reimbursement pressures, according to Kaufman Hall’s 2025 Health System Performance Outlook report.

Nearly 60% of surveyed organizations reported non-labor cost increases of 6% to 10% over the past year, driven largely by tariffs and ongoing challenges with payer reimbursement. Eighty-three percent of respondents said they have taken steps to quantify the financial impact of tariffs.