Indiana Hospital Association warns of members’ mounting financial difficulties, calls for legislative action

A new analysis prepared by healthcare consulting firm Kaufman Hall for the Indiana Hospital Association (IHA) details a worsening financial outlook for the state’s hospitals, with the association calling for help from legislators.

IHA says the analysis shows “margins remain below national averages,” and quoted numerous hospital leaders who warn that services and patient access are “at risk” without policy action. The analysis shows that Indiana hospitals posted a median operating margin of 1.9% in 2025 through August, below the national figure of 2.6%. Operating income among Indiana hospitals fell 5.5% year-over-year, “representing nearly $50 million in diminished resources available to support patient care,” and modeling in the analysis shows a “high probability of $1 billion in annual losses for Indiana hospitals over the next three to five years.”

IHA President Scott B. Tittle, JD, says “these findings make clear that Indiana hospitals are approaching a breaking point. Without meaningful policy changes, more hospitals — particularly in rural communities — will be forced to scale back or eliminate essential services.”

In a press release, IHA provided supporting quotes from:

• Brenda Reetz, CEO of Greene County General Hospital
• Matt Doyle, president and CEO of Methodist Hospitals
• Patrick McGill, MD, MBA, president and CEO of Community Health Network
• Mike Schroyer, RN, MSN, MBA, FACHE, president of Baptist Health Floyd

IHA calls on state and federal lawmakers to address the “systemic challenges facing hospitals” by modernizing the Medicaid reimbursement rate, reducing administrative burdens and insurer-imposed delays and denials, ensuring hospitals can continue providing essential services particularly in rural areas and supporting financial stability to prevent hospital closures and service reduction

“Indiana hospitals have demonstrated remarkable resilience, but resilience alone cannot fix a fundamentally unsustainable financial environment,” said Mr. Tittle. “We stand ready to work with our state and federal policy makers on solutions that will protect access to care for all Hoosiers.”

Read the full Kaufman Hall analysis here.