, which was driven primarily by staffing costs and inflation. But systemic, long-term trends will continue to challenge their traditional business model.
When hospitals lose these higher-margin services, "you're starving the system that needs profits to provide services that we all might need, but particularly uninsured or underinsured people might need," said UCLA professor Jill Horwitz.long claimed that much higher commercial insurance rates make up for what they say are inadequate government rates.
To break even in 2027, a "typical" health system would need payment rate increases of between 5-8% annually — twice the rate growth over the last decade, according to BCG. If the load is borne solely by private insurers, hospitals will need a 10-16% year-over-year increase.
"I think the hospitals have sort of said ... 'We can keep doing things the same way and we can just merge and get higher markups,'" said Yale economist Zack Cooper. "That push to consolidate is saying, 'Let's not move forward, let's dig in.'"than an independent physician's office would have, or they tack on facility fees, costs don't go down.