Healthcare finance leaders have expressed concern about industry regulations and the economy, with 84% in a new Deloitte survey saying they're concerned about business conditions stemming from potential policy changes and disruptions linked to tariffs and supply chains.
Almost three-quarters of respondents said they were concerned specifically about revenue growth and operating profitability.
Other concerns included consumer affordability, increased healthcare costs and the potential impact on their organizations' financial performance. Some said the Medicare Advantage medical loss ratio in early 2025 was the highest it has been in several years, due to a significant uptick in members' use of healthcare services – a trend they said may continue through the rest of the year.
WHAT'S THE IMPACT
Some concerns executives once considered urgent, such as workforce challenges and cybersecurity, have become less pressing, according to the survey results.
Other longstanding concerns remain, such as clinician burnout and low employee trust in healthcare leadership.
Tariffs and trade policy shifts topped the list of potential policy changes that could have the most impact. Tariffs on imports of goods such as prescription drugs, medical equipment and other medical supplies (which account for about 20% of the average U.S. hospital's expenses) could increase hospital costs by 15% or more, executives estimated.
In terms of regulatory changes, health plan finance leaders cited changes to drug pricing policies, such as modifications to the Inflation Reduction Act, as the changes that are most likely to have big impacts.
Key IRA provisions for Medicare include capping annual out-of-pocket drug costs at US$2,000, eliminating the coverage gap phase (also known as the "donut hole"), and shifting a greater share of catastrophic drug costs from the government to health plans.
Potential Medicaid reform was also listed as an impactful change, with concerns centering around lower reimbursement rates and eligibility reductions.
THE LARGER TREND
In May, the American Hospital Association expressed concern about drug and other shortages that may occur as a result of tariffs implemented by the Trump administration on items such as pharmaceuticals, medical devices and personal protective equipment.
Other low-margin, high-use medical goods such as syringes, needles and blood pressure cuffs come from international sources, the AHA said.
The volatility of tariff policies is making it difficult for hospital executives to pin down the effect they will have on the supply chain and budget.
It's not just the products themselves that are important, but the raw materials for pharmaceuticals, which mainly come from China, the AHA said. These active pharmaceutical ingredients, or APIs, are the most important components of any pharmaceutical manufacturer's supply chain, the group said. Additionally, about 30% come from China, so the tariffs may hamstring manufacturers in their efforts to produce drugs in the U.S.
China is also a major source of medical devices – many of them designed for single use, like blood pressure cuffs and stethoscope covers, and disrupting the availability of these instruments could hinder clinicians' ability to perform surgeries and keep patients safe from contagion, the AHA said.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.