March 16, 2026- A new report from the American Hospital Association (AHA) highlights mounting challenges for U.S. hospitals as they care for increasingly complex patients.
Key findings from the report include:
- Workforce Spending Remains Top Expense. Hospitals continue to invest heavily in their workforce. About 60% of total expenses went to paying the talented doctors, nurses, specialists and other professionals who allow hospitals to provide around-the-clock care and services. In 2025, workforce costs rose 5.6% from the previous year.
- Hospital Costs to Care for Patients Grew Twice as Fast as Hospital Prices. In 2025, total hospital expenses grew 7.5%, more than twice the rate of growth in hospital prices. Hospital expenses for supplies increased 9.9% and drugs increased 13.6%.
- Most Hospital Costs Are Tied to Service Lines Where Reimbursement Falls Short of the Cost of Delivering Care. About 56% of hospital costs are tied to service lines where reimbursement falls short of (or is less than) the cost of delivering care, including behavioral health, obstetrics, infectious disease, and burns and wounds. Many of these services are only available in hospitals, so they are essential to the health of the community.
“Rising costs for labor, supplies, drugs, and administrative burdens caused by corporate insurers, combined with caring for sicker patients, have created challenges for hospitals and health systems,” said AHA President and CEO Rick Pollack. “These strains are jeopardizing hospitals’ ability to provide around-the-clock care and services that patients and communities need.”