Healthcare is on the cusp of a pricing crisis. As a result of nationwide inflation, The Advisory Board reports that hospital expenses are up more than 25% since 2020 and salaries are up nearly 10% in the last year. The Advisory Board also reports that while hospitals typically request price increases of 4% to 6% per year, this year’s requests are expected to be twice as high, in large part because government reimbursements are not expected to increase. Payers and employer groups are signaling they may not pay. Rethinking strategy on efficiency and operations may seem inevitable as the only lever to combat the inflation challenge, but it doesn’t need to be.
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