Growth in labor costs slowed for the first time during the beginning of 2023.
Through the first quarter of the year, hospitals and health systems have continued to face a barrage of financial challenges, with rising expenses coming in as one of the most significant obstacles to these organizations’ economic well-being.
Indeed, a new report from Syntellis, which pulled information and data from over 1,300 hospitals and 135,000 physicians, found that hospitals continue to face rising expenses, with March marking the eleventh consecutive month of year-over-year increases for total expenses and total non-labor expenses.
Total hospital expenses rose by 4.7% year-over-year, according to the Syntellis data, and total non-labor expenses grew by 5.5% year-over-year. The rise was the result of higher drug costs, rising supply costs, and an increase in costs for purchased services. Although the data found that labor costs are still high, the growth in these expenses slowed for the first three months of the year.
While costs in general are still rising, the research found that providers are not letting that stop them from providing patients with the high-quality care they need.
"Hospitals continue to endure intense financial and operational pressures, yet a deep dive into clinical data from hospitals nationwide suggests they remain unwavering in their commitment to providing consistent levels of patient care," Steve Wasson, executive vice president and general manager for data and intelligence solutions at Syntellis, said in the report. "Despite shrinking reimbursements and relentless expense increases, healthcare organizations are finding ways to grow in-demand services and better manage high costs to ensure they do not compromise vital care for the communities they serve."
Amanda Schiavo is the Finance Editor for HealthLeaders.