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24% of Hospitals in the Red
About a quarter of hospitals across Wisconsin say they are losing money.
The latest report from the Wisconsin Hospital Associate shows that 24% of hospitals in the state operated at a loss last year.
“Wisconsin hospitals and health systems showed slight financial improvement after facing significant challenges in recent years. The 2024 report shows operating margins improving slightly across both hospitals and health systems compared to 2023,” the Hospital Association said in its report.
Overall, the WHA says health system margins jumped to 2.2% in 2024. That’s up from -0.8% in 2023, however, the WHA said those margins “remain far below pre-COVID health system margins.”
The report also notes that 17 of Wisconsin’s 80 safety net hospitals operated at a loss last year.
One of the major reasons is the continued spike in costs.
Hospitals, according to the report, are paying 11% more for “supply and service costs,” while they are paying 10% more for salaries, benefits, and new workers.
The Hospital Association said those salary costs are largely driven by “workforce shortages.”
“As a proportion of total expenses, overall salaries and fringe benefits for Wisconsin GMS hospitals have decreased over time, from 52.4% in FY 1993 to 41.8% in FY 2024. The supplies and services proportion has increased from 36.8% to 52.7%,” the report added.
The other main reason for operating losses is that many hospitals across Wisconsin are collecting just a fraction of what it charges.
“Overall, Wisconsin hospitals collected 31.2 cents for each dollar they charged in FY 2024, less than the proportion they received in 2023 [which was ] 32.3 cents,” the report added.
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