A recent survey of Indiana Hospital Association (IHA) members highlights the financial challenges Hoosier hospitals continue to face due to an unprecedented workforce crisis, skyrocketing costs of drugs, labor, and equipment, and lingering supply shortages.
According to IHA’s survey of Indiana hospitals, since Q1 of 2021:
- One-fifth of Indiana hospitals have lost 20 percent or more of their days of cash on hand. Even for just seven Indiana-based health systems that were part of the survey, the losses total roughly $3 billion.
- Nearly 70 percent of hospitals have seen travel nurse expenses increase more than 20 percent
- Meanwhile, hospitals have spent more to retain critical staff. Over half have increased salaries and benefits by 15 percent or more, and an additional third have reported that labor costs increased nearly 30 percent over the same time period.
- Seventy-five percent of Indiana hospitals have paid up to 15 percent more on critical medical supplies like syringes, gloves, and other personal protective equipment (PPE).
- Fifty-seven percent of hospitals have reported that their pharmaceutical drug supply spend has increased by at least 10 percent.
“These financial impacts are hitting while hospitals are rebuilding from the peak of the pandemic which stretched our resources beyond belief just earlier this year,” IHA President Brian Tabor said.
According to the Center for Healthcare Quality and Payment Reform (CHQPR), Indiana has the highest risk of hospital closures among its surrounding states with 38 percent of Indiana’s rural hospitals at immediate risk of closing due to continuing financial losses and lack of financial reserves to sustain operations.
Further, the Medicare Payment Advisory Commission projects that the negative margin hospitals experience in Medicare will grow in 2022. In Indiana, 83 percent of all hospitals have 67 percent or more of their inpatient days paid by Medicare or Medicaid. For just under half of Indiana hospitals, the percentage is greater than 75 percent.
“Taken together, these challenges are incredibly daunting for our health care system, our patients, and our communities,” Tabor said. “The perfect storm is brewing, and we must make sure hospitals and caregivers have the resources they need to provide access to the high-quality health care Hoosiers rely on – 24 hours a day, seven days a week.”
About Indiana Hospital Association
The Indiana Hospital Association serves as the professional trade association for more than 170 acute care, critical access, behavioral health, and other specialized hospitals in Indiana. IHA advocates on behalf of its members in Indiana’s General Assembly, U.S. Congress, and with multiple regulatory agencies at the state and federal levels. Dedicated to improving quality, patient safety, and Hoosiers’ health status, IHA holds numerous grants and facilitates collaboration among hospitals to improve outcomes. IHA also provides members with the data analytics that they need to ensure access to quality, cost-effective health care services across the state of Indiana. To learn more about IHA, visit IHAconnect.org.