Hospitals and health systems continue to face rising costs, economic pressures
An American Hospital Association (AHA) Report revealed that hospitals and health systems continue to experience significant financial pressures, challenging their ability to provide patient care. Data from 2023 showed that hospitals and health systems continued to face high costs for labor, drugs, and supplies. Additionally, Medicare and Medicaid reimbursements did not keep pace with higher costs, leading health systems and hospitals having to navigate commercial insurer practices such as denying and delaying access to payment and patient care. In 2024, these challenges have persisted, and have also been exacerbated by events such as the recent Change Healthcare cyberattack.
The AHA report showed that economy-wide inflation grew by 12.4% between 2021 and 2023. It also showed that workforce challenges continue to cause financial stress for hospitals, with hospitals’ labor costs, which on average accounts for 60% of a hospital’s budget, increased by more than $42.5 billion between 2021 and 2023.
CommonSpirit Health announces plans to expand in-house GPO
CommonSpirit Health, one of the nation’s largest nonprofit health systems, is excited to announce its plans to grow its internal Group Purchasing Organization (GPO) – Edgewise. Edgewise is CommonSpirit Health’s in-house GPO and also provides GPO services to member organizations outside CommonSpirit. By growing Edgewise’s reach and scope, CommonSpirit will be able to serve the diverse needs and provide even greater value to its members.
CommonSpirit is also releasing a Request For Proposal for a support Group Purchasing Organization (GPO). While a third-party GPO will continue to play a role in CommonSpirit’s procurement strategy, the scope of this partnership will be redefined to meet CommonSpirit’s changing needs.