The Wisconsin Hospital Association Information Center (WHAIC) announced in a recent press release its annual Guide to Wisconsin Hospitals for FY2022, which shows Wisconsin hospitals and health systems are facing their most significant financial challenges in over a decade. The financial strains are in large part due to patients returning to pre-pandemic routine care and the rising costs for medical supplies and services due to record inflation.
According to the report, the largest expenses facing hospitals remain supplies and services. These input costs are mostly out of hospitals’ control and have increased 26.73% since 2019.
The second-largest expense facing hospitals and health systems includes salary and fringe costs, driven in large part by a workforce shortage. These expenses have increased 13.51% since 2019.
Capital costs have also increased, rising 6% since 2019.
Comparing fiscal year 2019 to fiscal year 2022, Wisconsin hospitals experienced a decrease of 37.5% in their operating margins. Fifty-three Wisconsin hospitals had a negative operating margin, while 65 hospitals had a negative total margin, both of which are the highest number of hospitals in the past 10 years. In addition, operating margins for health systems also decreased to -0.1% in 2022 compared to 3.9% in 2019, which is the lowest operating margin for health systems in the past 10 years.
