Sunk By Sunk Cost

Bankruptcies of health care provider organizations were up significantly in 2022 (see Healthcare Sector Bankruptcy Filings Increased By 84% From 2021 To 2022). And the increase in bankruptcies among the largest ($100+ million) in revenue was surprising to me. These data are consistent with the November update on health system and hospital finances by Kaufman Hall, showing bottom lines improving a bit—but still in the negative (National Hospital Flash Report).

In his commentary on their report of hospital finances, Kaufman Hall's managing director Ken Kaufman brought up the importance of addressing the problem of perception around “sunk costs . . .