National Daily Hospital News
Executive Briefing
Wednesday, November 19, 2025
Today: Tariffs and Margin Challenges; Transitional Care Solutions; New Payor Hospital Relationships offer Hope Case Study
Global & Health Sector Headlines – Hospital Finance, Margins, and Expense Pressure
News – Rising expenses are flattening hospital margin gains again.
A new Strata Decision Technology analysis finds that while hospital and health system operating margins improved early in 2025, drug and supply expenses have surged, and “operating margins have faltered throughout the first three quarters of 2025” as organizations face higher tariffs, inflation, and supply chain costs. Strata Decision Technology
https://www.stratadecision.com/press-release/soaring-drug-and-supply-expenses-undercut-hospital-and-health-system-margin-growthNews – The performance gap is widening even as average margins hold flat.
HealthLeaders reports that in November 2025, hospital financial performance is bifurcating: while overall margins remain slightly positive, large and well-capitalized systems are stabilizing or growing, and lower-performing hospitals are seeing flat or declining margins as they struggle with costs and shifting payer mix. HealthLeaders Media
https://www.healthleadersmedia.com/ceo/hospital-financial-performance-gap-widens-margins-hold-flatNews – Heading into 2026, hospitals face new financial headwinds.
A recent ACDIS analysis notes that margins, though positive, have been “steadily declining since January 2025,” with uncompensated care projected to rise and tariff-related supply costs adding pressure; the report warns hospitals to prepare for a tougher 2026 unless they tackle cost structure and revenue resilience. acdis.org
https://acdis.org/articles/news-hospitals-face-financial-headwinds-going-2026-analysis-showsRecommendation – Address the “gathering storm” of cost and tariff shocks.
A November 2025 McKinsey brief highlights that U.S. trade-weighted tariff rates have jumped from about 2.2% at the start of 2025 to 16.9% by August 8, 2025, intensifying medical supply and capital equipment costs; the authors advocate aggressive spend management, supply chain resilience, and clinical variation reduction as key margin-protection strategies. McKinsey & Company
https://www.mckinsey.com/industries/healthcare/our-insights/gathering-storm-2-0-succeeding-in-healthcare-despite-the-turbulenceNews – Workforce shortages remain a hidden margin and quality risk.
A 2025 workforce scan from AHA and separate staffing statistics compiled by AAG Health describe persistent shortages, high vacancy and turnover, and heavy reliance on contract labor, with nurse burnout and workload still strongly associated with patient safety and quality outcomes. nursingoutlook.org+3American Hospital Association+3AAG Healthcare+3
https://www.aha.org/system/files/media/file/2024/11/2025-Health-Care-Workforce-Scan.pdf
https://www.aag.health/post/healthcare-staffing-statistics
https://pmc.ncbi.nlm.nih.gov/articles/PMC12013355/
Hospital Quality, Readmissions, Transitional Care & Case Management
News – Transitional care shows promising results across multiple models.
A 2025 NORC research brief concludes that well-designed transitional care programs reduce readmissions, save money, and give patients “more healthy days at home,” emphasizing structured follow-up, medication reconciliation, care coordination, and caregiver support as central components. NORC
https://www.norc.org/research/library/transitional-care-shows-promising-results.htmlCase Study – TCM visits cut 30-day readmissions in a large health system.
A 2025 study from Northwell Health published in PLOS One found that patients with Transitional Care Management (TCM) visits had a 30-day readmission rate of 8.4%, compared to 13.9% for patients with non-TCM follow-up, with a hazard ratio of 0.74 (0.63–0.88) after matching — supporting both visit-level and clinic-level transformations in follow-up care. PMC
https://pmc.ncbi.nlm.nih.gov/articles/PMC11698425/News – National readmission averages remain stubbornly high.
A November 2024 synthesis by BHM Healthcare Solutions, drawing on Definitive Healthcare data, reports that the average 30-day hospital readmission rate across the U.S. is about 15.3%, with some states reaching 17.4%, underscoring why readmission penalties and readmission-reduction programs remain central to CMS policy. BHM Healthcare Solutions
https://bhmpc.com/2024/11/reducing-hospital-readmission-rates/News – CMS will extend readmission penalties to Medicare Advantage in FY 2027.
Reuters reports that CVS Health, via its Aetna Medicare Advantage arm, is expanding a program that assigns Aetna-employed nurses to coordinate post-discharge care, in part because a new CMS rule will include Medicare Advantage members in hospital readmission penalty calculations starting in FY 2027 — a shift that raises the stakes for coordinated transitions across all payers. Reuters+1
https://www.reuters.com/legal/litigation/cvs-expand-program-aimed-reducing-hospital-readmissions-medicare-members-2025-09-22/
https://www.cms.gov/medicare/quality/value-based-programs/hospital-readmissionsCase Study – Payer–hospital partnership model for readmission reduction (New Case Study).
The CVS–Aetna program, initially focused on Medicare Advantage, includes nurse-led coordination, in-home services, and transportation to follow-up appointments for recently discharged members; early results are promising enough that CVS is expanding to 10 hospitals, illustrating how payer–provider collaboration can create shared savings and improved outcomes. Reuters
https://www.reuters.com/legal/litigation/cvs-expand-program-aimed-reducing-hospital-readmissions-medicare-members-2025-09-22/Recommendation – Start with the end: planned discharge and LOS reduction.
A 2025 review in BMJ Quality & Safety emphasizes that establishing an expected discharge date (EDD) within 24 hours of admission and reinforcing it daily reduces non-medical delays, shortens LOS, and improves satisfaction by aligning multidisciplinary teams and post-acute providers around a shared timeline. PMC
https://pmc.ncbi.nlm.nih.gov/articles/PMC12308768/Case Study – VIDA project increases discharges before noon and improves capacity (New Case Study).
A 2025 DNP project from Valparaiso University shows that implementing a “Very Important Discharge Appointment” (VIDA) process — linking morning discharges to confirmed follow-up — increased discharges before noon and improved throughput, while also reinforcing patient engagement in post-discharge care. ValpoScholar+1
https://scholar.valpo.edu/ebpr/212/
Early Morning Briefing Highlights
Margins are positive but fragile, with expenses eroding gains.
Strata Decision and other analysts report that 2025 margin improvements are being undercut by rising drug, supply, and tariff-related costs, leaving many hospitals with only a few percentage points of operating margin and an expanding gap between top and bottom performers. McKinsey & Company+3Strata Decision Technology+3HealthLeaders Media+3Cost pressures are increasingly global and structural, not temporary.
McKinsey notes that U.S. trade-weighted tariff rates have increased almost eightfold in 2025, driving structural pressure on supply chains and capital budgets and forcing health systems to rethink sourcing, inventory, and capital planning. McKinsey & CompanyTransitional care is no longer experimental — it’s a proven readmission lever.
NORC’s 2025 research brief and the Northwell PLOS One study both point to significant readmission reductions and better “days at home” when structured transitional care management and follow-up are implemented. NORC+1Readmission penalties are expanding to Medicare Advantage.
With CMS preparing to include Medicare Advantage members in readmission penalty calculations in FY 2027, payers and hospitals are moving quickly to build joint transitional care programs and nurse-led care coordination. Reuters+1Discharge planning and early discharge processes are essential tools for both capacity and quality.
Recent work on EDDs, discharge-before-noon initiatives, and projects like VIDA show that early, structured discharge planning can reduce LOS, improve patient satisfaction, and support safer transitions — if tied to robust follow-up and case management. PMC+2ValpoScholar+2
Strategic Implications for Leadership
Build a “Margin Protection” program that includes both cost and flow.
Finance, supply chain, and clinical operations should jointly own a margin protection portfolio that includes: supply and drug spend management, LOS reduction, discharge-by-noon initiatives, and readmission reduction — because each day of avoidable LOS and each preventable readmission now sits directly on a razor-thin margin. NORC+5Strata Decision Technology+5HealthLeaders Media+5Treat transitional care as a core service line, not a grant-funded project.
The evidence now supports transitional care (including TCM, home visits, telehealth follow-up, and case management) as a core competency tied to CMS HRRP penalties and payer contracts, not a “nice-to-have” pilot; leadership should ensure stable funding, staffing, and analytics for these programs. Reuters+3NORC+3PMC+3Align payer strategy with readmission risk.
With Medicare Advantage members entering the readmission penalty calculation, hospitals must proactively partner with payers (as CVS–Aetna is doing) to share data, coordinate outreach, and align incentives — or risk being held accountable for readmissions they cannot influence alone. Reuters+1Use EDD and discharge-by-noon as operational “anchor metrics.”
Expected discharge dates set within 24 hours, reinforced daily, and paired with VIDA-style appointment processes give teams a concrete, shared metric to manage; these metrics should appear on daily huddles, unit scorecards, and executive dashboards alongside LOS and readmission rates. PMC+2ValpoScholar+2Integrate burnout, staffing, and quality into the same conversation.
The workforce scans and burnout literature make it clear that nurse workload and safety culture are strongly related to patient outcomes; leaders should incorporate staffing, burnout measures, and safety culture data into their readmission and LOS strategy, recognizing that over-stretched teams are less able to execute complex transitional care workflows. nursingoutlook.org+3American Hospital Association+3AAG Healthcare+3
Quality Metrics to Share with Your Team (≤ 7)
Operating margins under pressure.
Strata Decision reports that operating margins “have faltered throughout the first three quarters of 2025” as drug and supply expenses escalate, even after early-year improvements. Strata Decision Technology
https://www.stratadecision.com/press-release/soaring-drug-and-supply-expenses-undercut-hospital-and-health-system-margin-growthTariff shock to healthcare input costs.
McKinsey estimates that U.S. trade-weighted tariff rates rose from about 2.2% to 16.9% between January and August 2025, adding sustained pressure to hospital and health system supply costs. McKinsey & Company
https://www.mckinsey.com/industries/healthcare/our-insights/gathering-storm-2-0-succeeding-in-healthcare-despite-the-turbulenceAverage 30-day readmission rate.
BHM’s 2024 summary using Definitive Healthcare data shows an average U.S. 30-day readmission rate of 15.3%, with some states as high as 17.4%. BHM Healthcare Solutions
https://bhmpc.com/2024/11/reducing-hospital-readmission-rates/TCM vs non-TCM readmission rates.
In the Northwell Health study, TCM patients had a 30-day readmission rate of 8.4%, versus 13.9% for non-TCM follow-ups (hazard ratio 0.74; 95% CI 0.63–0.88). PMC
https://pmc.ncbi.nlm.nih.gov/articles/PMC11698425/Transitional care impact on “days at home.”
NORC’s August 2025 brief concludes that transitional care programs can reduce readmissions and increase healthy days at home, with positive economic implications for both payers and providers. NORC
https://www.norc.org/research/library/transitional-care-shows-promising-results.htmlCMS readmission penalties already widespread.
CMS reports that in FY 2023, 75% of applicable hospitals were penalized under the Hospital Readmissions Reduction Program — a proportion that could grow as MA members are added to the calculation in FY 2027. CMS+1
https://www.cms.gov/medicare/quality/value-based-programs/hospital-readmissions
https://www.reuters.com/legal/litigation/cvs-expand-program-aimed-reducing-hospital-readmissions-medicare-members-2025-09-22/Burnout remains a systemic risk.
A 2025 survey of VHA healthcare workers found that while burnout decreased somewhat from its pandemic peak, levels remain high and are closely linked to system-level issues such as workload, work environment, and safety culture — all of which affect quality and readmission performance. PMC+1
https://pmc.ncbi.nlm.nih.gov/articles/PMC12013355/
Leadership Call to Action (≤ 5)
Create an integrated “Margin & Quality” dashboard.
Combine operating margin, supply and drug spend, contract labor cost, LOS, discharge-by-noon, and readmissions into a single executive dashboard reviewed monthly, with clear owners and action plans for each metric.Stand up or strengthen a Transitional Care Program with TCM as a backbone.
Use the TCM evidence to justify staffing for a multidisciplinary transitions team (hospitalists, PCPs, nurses, case managers, pharmacists) that guarantees structured follow-up within 7–14 days for high-risk discharges.
https://pmc.ncbi.nlm.nih.gov/articles/PMC11698425/Partner proactively with payers on readmissions.
Reach out to major MA and commercial payers to explore joint programs modeled on the CVS–Aetna approach — nurse-led outreach, transportation, home visits, and data sharing — to protect both patient outcomes and margin as readmission penalties expand.
https://www.reuters.com/legal/litigation/cvs-expand-program-aimed-reducing-hospital-readmissions-medicare-members-2025-09-22/Hard-wire early discharge planning and EDD practices.
Require an expected discharge date within 24 hours of admission for targeted DRGs and reinforce it on daily rounds and case management huddles, connecting morning discharges directly to scheduled follow-up appointments (VIDA-style).
https://pmc.ncbi.nlm.nih.gov/articles/PMC12308768/
https://scholar.valpo.edu/ebpr/212/Make workforce and burnout metrics part of your quality agenda.
Integrate nurse workload tools, burnout survey results, and safety culture assessments into your readmission and LOS improvement work, recognizing that sustainable improvement in transitions and case management depends on staffing models that your teams can actually execute.
https://www.aha.org/system/files/media/file/2024/11/2025-Health-Care-Workforce-Scan.pdf
https://www.aag.health/post/healthcare-staffing-statistics
National Daily Hospital News
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