Hospital Sustainability

Pennsylvania hospitals are facing severe challenges to their financial stability that threaten the care they provide and the benefits they bring to their communities. 

Hospitals and Communities are at Risk

Hospitals save lives and provide high-quality care to all who need it, regardless of ability to pay. They lead efforts to improve public health and innovation to advance care. They are often the top job creators and economic engines in their communities.

Hospitals can’t support that mission without financial stability—and that stability is at risk. Continued losses put hospitals at risk of having to reduce services, forgo plans to serve their communities in new ways and, in extreme cases, close facilities.

Financial Challenges

More than half of the commonwealth's acute care hospitals are operating at a loss. Why? Simply put, payments do not cover the cost of care and have not kept up with rising expenses.

Hospitals are increasing their investments in developing, recruitng, and retaining health professionals, and the cost of drugs, supplies, and administrative burdens continue to increase. At the same time, Pennsylvania hospitals are navigating decades-old state regulations that do no reflect modern care delivery and a medical liability climate that's approaching a crisis.

Payments from public and commercial payors have not kept up with rising costs. On average, Medicare and Medicaid reimburse hospitals at 82 and 81 cents respectively for each dollar it costs them to provide care.

A ‘Perfect Storm’

A January 2023 report by Health Management Associates found that staffing shortages and rising costs have created a “perfect storm” for Pennsylvania hospitals.

According to the report: “As the post-COVID-19 challenges and disruptions continue, we anticipate hospital financial concerns about liquidity will grow. Pennsylvania hospitals are taking the lead in addressing many of these challenges, but without additional support, it is unclear whether many hospitals will be able to weather the financial disruption this crisis has created, which could, in turn, affect access to care across the commonwealth.”

 

HAP Contacts

For more information, contact John Myers, HAP's vice president, federal advocacy; or Stephanie Watkins, senior vice president, advocacy & policy. Media inquiries should be directed to Kim Yakowski, manager, media relations.

 

HAP News

 

December 03, 2024

Workplace Violence Roundtable Addresses Challenges, Aims for Possible Solutions, Collaborations

Violence against health care professionals is a growing challenge in hospitals throughout the commonwealth. Today, HAP organized a roundtable event hosted by Allegheny Health Network Grove City hospital to bring together area hospitals, policymakers, law enforcement, and emergency management leaders to discuss the challenges they face, pending legislation, and ideas for possible collaboration.

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More than Care at Stake

When a hospital's sustainability is threatened, access to health care is only the start of what’s at risk in the community. HAP's report, Critical to Communities, Pennsylvania Hospitals' Economic Impact, highlights the many ways hospitals are important to their communities and Pennsylvania.

Critical to Communities, HAP Report


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