Hospitals Aren’t Meeting Their Own Modest Cost-Cutting Goals

Hospitals, which are responsible for the biggest share of U.S. health-care spending, are beginning to wake up to the reality that they need to reduce their costs. But few have met even their own modest goals for doing that.

Analysts and employer groups point to a range of reasons why hospitals are having a hard time reducing costs, such as high labor costs and a big need for capital to fund strategic initiatives.

Hospitals also can escape pressure to control their costs because they’re able to charge employers pretty much at will since employers have fewer choices due to consolidation. ...