Wisconsin Hospitals and Health System Finances Stabilized in 2024, But Challenges on the Horizon

Wednesday, November 5th, 2025 -- 1:00 PM

(Joe Schulz, Wisconsin Public Radio) Wisconsin hospital and health system finances stabilized slightly last year, but providers could face challenges moving forward from rising costs and potential increases in the number of people without health insurance. 

According to Joe Schulz with the Wisconsin Public Radio, the Wisconsin Hospital Association released its annual Guide to Wisconsin Hospitals on Thursday, providing insight into the financial well-being of the state’s health systems in 2024.

Health system operating margins rebounded slightly in 2024 after being in the red in 2023, the report noted. Among 23 Wisconsin health systems, comprising 129 hospitals, operating margins rose from negative 0.8 percent to 2.2 percent.

That means operating revenues slightly exceeded operating expenses. Kyle O’Brien, president of the Wisconsin Hospital Association, said operating margins were still “only about half of the margin” that hospitals had before the COVID-19 pandemic.

He said the “modest improvement” from 2023 to 2024 might not last. “That doesn’t necessarily indicate that that is going to be the future trend,” O’Brien said. “There’s still cost pressures and expense pressures, along with reimbursement pressures, not only from government payers but commercial insurers.”

While margins overall improved, 60 hospitals reported lower operating margins than in 2023, and 41, including 17 “safety net” hospitals that provide care to all patients, regardless of their ability to pay, operated at a loss, according to the hospital association.

O’Brien said hospitals operating in the red generally have a higher share of patients on government insurance programs, like Medicaid or Medicare, which he said reimburse hospitals less than the actual cost of care. He also said hospitals are facing increased difficulties in getting reimbursed from commercial insurance companies and Medicare Advantage plans.

“You’re seeing that in a lot of areas throughout the state, where hospitals are saying, ‘No, we can’t agree to a contract any longer because the rates that were being provided aren’t sufficient to actually keep up with the cost of delivering care to patients,’” O’Brien said. “That’s an added pressure that is a change in the marketplace in the last decade or so.”

Hospitals also continue to face rising costs. The report said supply and service costs have increased by 11 percent since 2022, and salaries and fringe expenses have increased by 10 percent.

The association says the growth in salary and fringe benefit expenses has been driven by a years-long workforce shortage. O’Brien said salaries, medical devices and pharmaceuticals account for much of hospitals’ rising costs.

“We have seen very significant increases in the cost of, for instance, medical devices and pharmaceuticals that have contributed to this increase in expenses that hospitals experience,” he said.

Potential federal spending cuts to Medicaid and Affordable Care Act subsidies could leave fewer people with health coverage in coming years. Work requirements for Medicaid recipients are expected to take effect in 2027.

Health policy nonprofit KFF, citing the nonpartisan Congressional Budget Office, said the work requirement policy would increase the number of people without health insurance but would not increase employment.

Similarly, the potential loss of enhanced Affordable Care Act subsidies has contributed to an estimated increase of ACA marketplace premiums of around 26 percent, according to KFF.

Stuart Craig, an associate professor of risk and insurance at the University of Wisconsin-Madison’s School of Business, said making ACA plans less affordable is likely to reduce enrollment.

Generally, he said hospitals prefer that patients have insurance. “Lots of hospitals will have a cash price that they offer when they know you don’t have insurance that’s maybe lower than what they would charge somebody in another situation,” he said. “But in most situations, they would prefer that person to be covered.”

O’Brien said the hospital association is in favor of the federal government extending the enhanced ACA subsidies. If Medicaid work requirements lead to more people getting commercial insurance, he said it could potentially benefit hospitals.

But he said members are concerned about potential losses in coverage in 2027. “Hospitals are always concerned if there is the potential that somebody loses coverage because hospitals are the one provider that has to serve everybody, regardless of their ability to pay,” O’Brien said.

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