Health systems have spent years emphasizing the need to control costs, especially as reimbursement rates and inflation failed to keep pace with operational demands. In 2025, these cost-containment efforts will persist, and with an added challenge: the expenses of adopting AI tools and the "babysitters" needed to oversee them.

After enduring operating losses in the third quarter of 2023, a wave of health systems turned their financial fortunes around in the third quarter of 2024, delivering improved margins and operating incomes. 

Mid Coast Medical Center-Central in Llano, Texas, is taking several measures to reduce costs and maintain operations at the facility. 

Congress has signed a pared-down funding bill to prevent a government shutdown but failed to pass measures in a previously proposed bipartisan package that would have offset the 2.83% Medicare pay cut physicians face in 2025. 

President Joe Biden signed a new spending bill on Dec. 21 to prevent a government shutdown.

Nashville, Tenn.-based HCA Healthcare has shared plans to demolish its empty Mission Hospital—St. Joseph campus in Asheville, N.C.

A Dec. 20 study published in JAMA from researchers at Baltimore-based Johns Hopkins University and Providence, R.I.-based Brown University has shed light on financial disparities between critical access hospitals and larger acute care hospitals.

Fitch downgraded Escondido, Calif.-based Palomar Health's issuer default rating from "BB+" to "B" after the system reported a "significant" operating loss in fiscal 2024. 

ShorePoint Health Punta Gorda (Fla.) hospital will not reopen after sustaining significant damage during Hurricanes Helene and Milton this fall. 

A government shutdown would leave HHS with about half of its staff, with 45% furloughed on the second day of closure.

Ohio lawmakers have passed hospital price transparency legislation that now heads to Gov. Mike DeWine's desk for his signature, The Columbus Dispatch reported Dec. 19.

Republican lawmakers on Dec. 19 failed to pass a pared-down government funding bill backed by President-elect Donald Trump after dropping a broader package he opposed. 

Hospital financial metrics overall have improved slightly in 2024 and on average, hospitals are more financially stable heading into 2025 when compared with last year, according to Kaufman Hall's National Hospital Flash Report.

Duluth, Minn.-based Essentia Health told city of Fosston, Minn., leaders that the city does not have the authority to unilaterally terminate an agreement allowing the health system to control Fosston Hospital. 

Hospitals and health systems reported slow margin improvement in 2024, and Fitch expects similar sluggishness in 2025. While some systems are reporting strong balance sheets, others see big financial headwinds in the coming year.

Health systems across the country reported mixed financial results in the third quarter, with operating margins ranging widely from double-digit gains to substantial losses. 

Somerville, Mass.-based Mass General Brigham reported a $72 million operating loss (-0.4% margin) for the fiscal year ending Sept 30, compared to a $48 million loss (-0.3% margin) from the previous fiscal year. The FY 2024 loss excludes $118 million in revenue from prior year activity while the FY 2023 loss excludes $143 million prior year revenue.

MacKenzie Scott has donated $50 million to Undue Medical Debt, the third time she has donated to the organization formerly known as RIP Medical Debt. 

Cleveland-based Sisters of Charity Health System has undergone significant changes over the last few years, shifting from running five hospitals across South Carolina and Ohio to now working solely to address social determinants of health.  

Chillicothe, Ohio-based Adena Health System posted an operating income of $3.3 million (1.7% margin) in the third quarter, reversing a $1.2 million operating loss (-0.6% margin) in the same period in 2023.