The State of Healthcare Finance

In 2023, Madera Community Hospital, located in Madera, California, was forced to close its doors and file for bankruptcy. As a result of low reimbursement rates, the cost of traveling nurses and inconsistent year-over-year profits, residents of Madera no longer have an acute care hospital in their county and are “at least a 30-minute drive away from the closest hospital with an emergency room,” according to a 2023 article in The Fresno Bee.

This is not an isolated incident. Many community hospitals across the country are struggling. They face mounting pressure from every direction: rising supply costs, labor shortages, inflated contract labor rates, declining Medicare reimbursements, inflation and an ever-changing regulatory environment, leaving hospitals to shoulder the burden. In addition, ambulatory surgery centers are increasingly drawing providers away from hospital settings by offering lower reimbursement, less overhead and more operational flexibility. Conversely, large investor-owned and not-for-profit health systems with multiple locations, sites-of-service and a diversified payer mix have come through the financial struggles of 2022–2023 and are seeing strong operating margins and are on solid financial footing. Add to this mix increasing payer consolidation, government payer price constraints, and price transparency regulations that make public rates that were once a well-guarded secret, and healthcare leaders have a complicated set of variables to navigate as they help steer their organization toward success.

In this session, we will explore the state of healthcare finance in depth and give healthcare leaders a framework to analyze how their organization fits within this complex healthcare environment.