LINCOLN- The increased costs of labor and supplies, and a failure of Medicaid and Medicare to fully reimburse services were the two main stressors on the state's hospital systems. Over half of the states hospitals operated in the red in 2022 and 2023 is expected to be no different. This has prompted cutbacks, service eliminations, and threats of closure for smaller rural hospitals.

“This trend is very concerning. The current economic model for hospitals is simply not sustainable,” said Summer Owen, CEO of Great Plains Health in North Platte. Bryce Brackle, vice president of finance for Nebraska Medicine in Omaha, said his hospital sustained an $18.6-million loss in 2022 and is projecting another year of red ink in 2023.

The Nebraska Hospital Association listed four factors for financial stress:

Labor challenges, including an exodus of employees during the high stress of the COVID-19 pandemic.
Workforce costs have risen 26.8% since 2020.
Inflation. Medical supply costs are up 25.4%, and drug costs have risen 42.5%.
Reimbursement rates for patients on Medicaid and Medicare, which haven’t kept up, with the average loss for Medicaid care of 60%.

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