Hospitals NAICS 622110

May 7, 2025 - States Sue Trump Administration Over HHS Changes

• Nineteen states and the District of Columbia filed a lawsuit against the federal government to block the Trump administration’s restructuring of the US Department of Health and Human Services (HHS). The plaintiffs argue that the restructuring is an “unconstitutional and illegal dismantling of the department.” They contend that the government has violated hundreds of laws and bypassed congressional authority by enacting the plan, leaving HHS unable to execute many vital functions. The plaintiffs also said that the restructuring has significantly hindered mental health and substance use services, HIV/AIDS response efforts, maternal mortality monitoring and disability support, among other key services.
• Nearly 750 rural US hospitals are at risk of closure due to financial problems, according to Becker's Health Care. Nearly half of those hospitals are at immediate risk of closure. The count of 748 at-risk rural hospitals comes from an analysis by the Center for Healthcare Quality and Payment Reform of hospital financial information collected by the Centers for Medicare and Medicaid Services. The CMS analysis lists two distinct levels of vulnerability among rural healthcare facilities: risk of closure and immediate risk of closure. Nearly every state has hospitals at risk of closure, measured by financial reserves that can cover losses on patient services for six to seven years. In over half of the states, 25% or more of rural hospitals face this risk, with 11 states having a majority of their rural hospitals in jeopardy. There are 315 rural hospitals at immediate risk of shutting down due to severe financial difficulties. Hospitals facing immediate threat of closure are those for which financial reserves could offset losses on patient services for two to three years at most.

• Most large health systems have recovered or exceeded their pre-pandemic margins but small and rural hospitals continue to struggle with financial performance, according to Moody’s credit rating agency. Operating performance, as defined by revenue, gradually improved at the 50 largest US hospitals in 2023, with cash flow margins increasing from 5.1% to 5.7%. Annual operating revenue growth also increased for the largest hospitals, to 9.3%. It surpassed the 8.6% expense growth for the 50 largest hospitals, reversing the trend from 2022. The 50 smallest Moody’s rated hospitals saw operating cash flow margin continue to decrease from 3.2% to 2.9%. And 68% of the 50 smallest hospitals reported an operating deficit—evidence of the ever-growing gap between large and small hospitals. This cohort of smallest hospitals and health systems had a median number of maintained beds of 283 and median revenues of $478 million.
• Hospitals slightly increased their prices during 2024, according to the US Bureau of Labor Statistics (BLS). Hospital industry employment and average wages for nonsupervisory employees increased slightly during the first month of 2025, according to the BLS.