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Health IT | News, Analysis, Insights - HIT Consultant

Hospital Margins Dip to 0.9% in Q3 as Supply and Drug Costs Escalate

by Fred Pennic 09/08/2025 Leave a Comment

A new Strata Decision Technology report on the financial performance of U.S. hospitals and physician groups, drawn from monthly data from over 1,600 hospitals and 135,000 physicians, reveals that health system operating margins dipped to 0.9% in July 2025. While health systems continue to benefit from steady revenue growth, they face persistent pressures from rising expenses. - The report finds median year-to-date (YTD) health system operating margin was 0.9% in July, down from 1.2% in June, though it remained consistent with levels since January. For U.S. hospitals, the median change in operating margin rose 1.4 percentage points year-over-year (YOY) but slipped 0.2 percentage points month-over-month. Non-Labor Costs Drive Expense Growth The nation's hospitals continue to experience significant expense growth compared to 2024, with non-labor expenses rising faster than labor expenses. Total non-labor expenses increased by 8.7% from July 2024 to July 2025, while labor expenses rose by 5.3% over the same period. Overall, total expenses grew by 6.8% YOY. Supply and drug costs drove the largest increases, climbing by 10.6% and 9.5% respectively, compared to July 2024. This trend is expected to continue as the industry feels the impacts of federal tariffs. Non-labor expenses grew YOY across all regions, with hospitals in the South reporting the largest increase at 9.5%. Outpatient Revenue Leads Growth Hospitals reported continued strength in gross revenues, marking the 27th consecutive month of YOY growth. Outpatient revenue posted the largest YOY gain, rising by 12.0% from July 2024 to July 2025. Inpatient revenue increased by 7.2%, while gross operating revenue grew by 10.6% over the same period. Patient demand was mixed but trended upward overall. Outpatient visits posted the strongest gains, rising by 6.6% compared to July 2024, as patient care continues to shift to more convenient and lower-cost outpatient settings. For example, outpatient upper gastrointestinal endoscopy saw a 21.2% YOY increase, and routine outpatient diagnostic echocardiograms were up by 20.9%. Physician Practices Face Mounting Expenses Physician practices also faced mounting expenses, with per-physician expenses rising for practices across all regions. The median per-physician expense reached a national median of $1.1 million annualized in July, up 6.9% from 2024 and 16.6% compared to 2023. Meanwhile, revenues rose as well, with the median net patient service revenue (NPSR) per physician FTE increasing by 4.7% over 2024. Physician productivity also improved, while support staffing levels declined. For more information about the repot, visit here.

What You Should Know:  - A new Strata Decision Technology report on the financial performance of U.S. hospitals and physician groups, drawn from monthly data from over 1,600 hospitals and 135,000 physicians, reveals that health system operating margins dipped to 0.9% in July 2025. While health systems continue to benefit from steady revenue growth, they face persistent pressures from rising expenses. - The report finds median year-to-date (YTD) health system operating margin was 0.9%
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Ransomware in RCM: Why Your Billing System Is an Overlooked Cybersecurity Risk

by Rob Stuart, CEO, Claim.MD 09/08/2025 Leave a Comment

Ransomware in RCM: Why Your Billing System Is an Overlooked Cybersecurity Risk

When a major healthcare payment processor was hit by a ransomware attack in early 2024, medical practices across the country were thrown into chaos. Routine billing processes, like eligibility checks, claims submissions, and payments, all ground to a halt. Some providers waited weeks to get paid. Others struggled to reassure anxious patients amid financial uncertainty. For small and midsize practices, the disruption wasn’t just inconvenient; it was existential. The incident exposed an
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Phreesia to Acquire AccessOne for $160M to Expand Healthcare Payment Solutions

by Fred Pennic 09/08/2025 Leave a Comment

Phreesia to Acquire AccessOne for $160M to Expand Healthcare Payment Solutions

What You Should Know:  - Phreesia, Inc., a company specializing in patient activation, has entered into a definitive agreement to acquire AccessOne Parent Holdings, Inc., a portfolio company of Frontier Growth.  - The all-cash transaction is valued at $160M and is expected to close in the third or early fourth quarter of Phreesia’s 2026 fiscal year. AccessOne Background  AccessOne is a market leader in providing financing solutions for healthcare receivables, working
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US Court Allows Particle’s Antitrust Claims Against Epic to Proceed

by Jasmine Pennic 09/08/2025 Leave a Comment

Particle Health Addresses Integration to Epic Data Despite Dispute

What You Should Know:  - A U.S. District Court judge in the Southern District of New York, Judge Naomi Buchwald, has allowed Core Antitrust Claims against Epic to proceed.  - The ruling found that Particle Health, a healthcare data platform, may move forward with its claims that Epic holds a monopoly in the payer platform market with a 90% market share and has engaged in anti-competitive conduct. The ruling marks as the first time an antitrust case against Epic has progressed
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Hello Patient Raises $22.5M to Scale Conversational AI for Patient Communications

by Fred Pennic 09/05/2025 Leave a Comment

Hello Patient Raises $22.5M to Scale Conversational AI for Patient Communications

What You Should Know:  - Hello Patient, a conversational AI company secures $22.5M in Series A financing led by Scale Venture Partners with participation from 8VC, Bling Capital, Max Ventures, Remus Capital, and FirstLook Partners. - The Hello Patient platform handles end-to-end patient conversations across voice, text, and chat, helping healthcare practices run leaner, grow faster, and deliver better care. With this new funding, the company plans to continue expanding its product
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Modernizing Medicare Advantage Translations: How AI Streamlines Compliance for Health Payers

by Patrick Kehoe, Executive Vice President of Product Management, Messagepoint, Inc. 09/05/2025 Leave a Comment

Modernizing Medicare Advantage Translations: How AI Streamlines Compliance for Health Payers

For healthcare payers offering Medicare Advantage and Dual Special Needs Plans (D-SNPs), the translation of member-facing materials is a costly, complex and high-stakes process. Translation requirements place an enormous burden on payers and, yet, it is critical for a positive member experience and accessibility in the U.S., where nearly 68 million people speak a language other than English at home. The Centers for Medicare & Medicaid Services (CMS) mandates that materials such as Annual
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Beyond the Black Box: Why Health Plans Must Redesign Utilization Management for Transparency

by Matt Cunningham, Executive Vice President of Product at Availity 09/05/2025 Leave a Comment

Beyond the Black Box: Why Health Plans Must Redesign Utilization Management for Transparency

For too long, utilization management (UM) has been the most painful source of abrasion between health plans and healthcare providers. Care decisions are too often made by third-party vendors with opaque regression algorithms trained on old data. Providers are left wondering why medically necessary care is delayed—or denied. And patients, caught in the middle, suffer the consequences. What was intended as a validation of medical necessity has become a byword for inefficiency, and a root of
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HealthEdge and UST HealthProof Merge to Modernize Health Plans

by Fred Pennic 09/05/2025 Leave a Comment

HealthEdge and UST HealthProof Merge to Modernize Health Plans

What You Should Know:  - HealthEdge and UST HealthProof have announced the successful completion of their merger, following Bain Capital's acquisition of UST HealthProof from UST.  - The combined company will operate as HealthEdge, with its headquarters in Boston. With a reach that touches over 110 million lives in the U.S., HealthEdge is now positioned to empower health plans with modern, AI-enabled technology and services that can lower total costs and improve operational
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MCG Health and Avo Launch AI Assistant to Reduce Hospital Length of Stay

by Fred Pennic 09/05/2025 Leave a Comment

MCG Health and Avo Launch AI Assistant to Reduce Hospital Length of Stay

What You Should Know:  - MCG Health, a part of the Hearst Health network, and Avo, a clinician-created AI platform, have launched a new AI assistant designed to tackle the challenge of hospital length of stay (LOS).  - The partnership integrates recovery milestones from MCG's proprietary guidelines directly into electronic health record (EHR) workflows using Avo's new assistant. This tool gives hospitalists and case managers a real-time picture of each patient’s readiness to go
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SoundHound AI Partners with Primary Health Solutions to Deploy AI Patient Engagement Platform

by Jasmine Pennic 09/05/2025 Leave a Comment

SoundHound AI Partners with Primary Health Solutions to Deploy AI Patient Engagement Platform

What You Should Know:  - SoundHound AI, Inc., a global leader in voice and conversational AI, has partnered with Primary Health Solutions (PHS) to deploy a new AI-powered patient engagement platform.  - The initiative makes PHS one of the first Federally Qualified Healthcare Centers in the U.S. to use AI Agents to create a more seamless and engaging patient experience. Denise: Conversational AI Platform The new conversational AI platform, named "Denise" in honor of a PHS
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