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Hospitals Face Mounting Financial Pressures Amid Declining Margins, Rising Expenses
Hospitals and health systems across the U.S. saw operating margins narrow in November, driven by a combination of declining patient demand and rising expenses, according to data from Strata Decision Technology. These challenges have persisted through much of 2024, raising concerns about the financial sustainability of many organizations.
The median year-to-date operating margin for health systems decreased from 1.8% in October to 1.7% in November, marking the fourth decline in the past five months. Similarly, the median YTD hospital operating margin dropped from 4.9% in October to 4.7% in November.
Medigy Insights
U.S. hospitals and health systems are experiencing narrowing operating margins as patient demand falls and both labor and non-labor expenses—especially purchased services and workforce costs—continue to rise, raising concerns about long-term financial sustainability.
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