New IHA Survey Highlights Significant Financial Challenges Facing Hoosier Hospitals

​​​Oct. 10, 2022 (INDIANAPOLIS) — 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% 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% of hospitals have seen travel nurse expenses increase by more than 20%.
• Meanwhile, hospitals have spent more to retain critical staff. Over half have increased salaries and benefits by 15% or more, and an additional third have reported that labor costs increased nearly 30% over the same time period.
• 75% of Indiana hospitals have paid up to 15% more on critical medical supplies like syringes, gloves, and other personal protective equipment (PPE).
• 57% of hospitals have reported that their pharmaceutical drug supply spending has increased by at least 10%.

“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,” said IHA President Brian Tabor.

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% 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% of all hospitals have 67% or more of their inpatient days paid by Medicare or Medicaid. For just under half of Indiana hospitals, the percentage is greater than 75%.

“Taken together, these challenges are incredibly daunting for our health care system, our patients, and our communities,” said Tabor. “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.”

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