By the end of the second quarter, many health systems across the U.S. managed to address payment shortfalls caused by the Change Healthcare cyberattack in February, and subsequent payment processing disruption, according to a report from Strata Decision Technology. However, smaller health systems continue to face challenges, still missing an estimated 3% to 5% of expected revenue from February patient encounters.

The largest health systems, which initially suffered significant impacts, were among the quickest to recover. Conversely, smaller systems with annual operating expenses under $500 million have experienced the most prolonged effects, with a shortfall of 11.1% in Medicare inpatient payments. In contrast, mid-sized systems with expenses between $500 million and $1 billion reported the smallest shortfall of 1.5%.

Steve Wasson, chief data and intelligence officer at Strata, highlighted that while larger systems narrowed their gaps, smaller systems struggled due to limited resources, despite some payors offering bridge and accelerated payments.
The report also noted that hospitals have reduced their reliance on contract labor while increasing employee pay. Contract labor costs dropped from 6.9% in July 2023 to 4.4% by June 2024. Simultaneously, hospitals increased hourly wages, with year-over-year raises ranging from 1.9% to 3.1%.

These trends suggest a strategic shift toward retention and recruitment, with variations observed across regions. For registered nurses, hospitals reduced contract hours and hourly rates for contract nurses, signaling cost-saving measures.

The findings were drawn from Strata’s StrataSphere and Comparative Analytics databases, which include data from over 1,600 hospitals.

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