Hospitals And Health Systems Market Report 2022

Hospitals And Health Systems Market Report 2022

Executive Summary
Hospital revenue has continuously grown through the pandemic and is expected to reach $2.21 trillion by 2030. Hospitals lead U.S. healthcare expenditures at 32% of total U.S. healthcare spending.

Despite revenue growth, 2022 began with major hospital profit declines with over a third of hospitals operating with negative margins. From December 2021 to March 2022, median operating margins fell from 3% to -2.4%.

Pandemic Leads To Change In Hospital Payer Mix
Nearly 75% of hospitals and health systems have experienced a shift in their payer mix. The share of Medicaid patients is on the rise while private health insurance and out-of-pocket payments have decreased. These changes come during a period where hospitals, due to inflation, have experienced an increase in the price of medical supplies. In 2022, hospital expenses are projected to reach $1.2 trillion.

New Rural Hospital Category Expands Emergency Care Access
More than 500 rural hospitals in the U.S. are at risk of closure due to financial loss. Congress created Rural Emergency Hospitals (REH) to address concerns about rural hospital closures and the lack of emergency care access. REHs will begin in January 2023 at a fixed monthly Medicare rate and offer 24-hour emergency department care.

Increase In Inpatient Volume Comes After Years-Long Decline
Hospitals are seeing increased patient acuity, which is resulting in higher inpatient volume and longer lengthof-stay. Compared to 2021, patients in April 2022 stayed in the hospital 3.5% longer and the frequency of discharges diminished by 4.4%. This trend is fueled by patients with chronic conditions who delayed care during the pandemic and now arrive to hospitals requiring more infusions, costly specialty drugs, and expensive supplies.

Personnel Shortages Are The Top Concern Of Hospital CEOs
In 2022, 30% of all hospitals reported critical staffing shortages. In 2021, the personnel shortage reached the top of the list of concerns held by hospital CEOs. Previously, financial challenges had led the rankings since 2004 as the most significant challenge affecting community hospitals. Registered nurses lead as the top hospital personnel shortage position, with technicians following closely behind.

Mergers And Acquisitions Decline But Consolidations Increase
Compared to 2021, total hospital mergers and acquisitions decreased by 34% in 2022. Four of the 12 mergers and acquisitions in the first quarter of 2021 were below $100 million, resulting in fewer mega-mergers than in previous years. However, hospital leaders expect that by the end of 2022 hospital consolidations and restructuring will rise near pre-pandemic levels.

Executive Summary
Market Overview
Many Hospitals Expect Negative Year-End Margins
Hospital Volumes Exceeding Pre-Pandemic Levels
Public Health Emergency Funding Reduces Hospital Closures
New Opportunity For Rural Emergency Hospitals Coming In 2023
Most U.S. Community Hospitals Are Not-For-Profit
COVID-19 Pandemic Shifts Hospital Payer Mix
Higher Patient Acuity Drives Bump In Inpatient Care
Personnel Shortage Leads Hospital CEO Concerns
Employment Declines, Largely Due To Workforce Shortage
Among Clinical Staff, Registered Nurses In Greatest Need
Salary Increases Are The Leading Tactic To Attract And Retain Staff
Reliance On Staffing Companies Drives Up Labor Expenses
Majority Of Hospitals Meet Worker Vaccine Mandate
Medical Supply Cost Increases Impact Intensive Care Units The Hardest
Supply Constraints Prompt Hospitals To Increase Inventories
Data Analytics Lead Investments To Improve Supply Chain Performance
Drugs Lead Hospital Expense Increases During COVID-19 Pandemic
Some Rural Hospitals Reached Positive Medicare Margins
Healthcare Providers Shift To Virtual Buying
Pricing Transparency Compliance Falls Short Of Consumer Expectations
IDNs’ Priorities Shift To Business Growth
HCA And CommonSpirit Among Largest IDNs
IDNs See Rapid Specialty Pharmacy Growth
IDNs Most Likely To Contract Directly With Manufacturers For Vaccines
Mergers And Acquisitions Decline Sharply In 2022
Clarivate Lists Top Hospital Products Sold Through Distribution

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