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Getting the latest healthcare news for you
Getting the latest healthcare news for you
U.S. hospitals saw a modest rebound in operating margins in June 2026, but performance still trails 2025 levels. Uncompensated care is surging — up 17% year-to-date compared to last year — while non-labor expenses continue to outpace inflation. The outlook is especially challenging for thin-margin hospitals serving vulnerable populations.
U.S. hospitals got a bit of good news in June: operating margins nudged upward, with the single-month operating margin index hitting 4.5% — a 6% improvement over May. But zoom out, and the story is less rosy. The calendar year-to-date operating margin index sits at just 2.5%, still 6% behind where hospitals stood at the same point in 2025, according to Kaufman Hall's latest monthly benchmark report drawing on data from 1,300+ hospitals.
The bigger concern? Uncompensated care is piling up fast. Daily bad debt and charity care rose 2% month-over-month in June and is now 17% higher year-to-date than in 2025. As a share of gross operating revenue, uncompensated care is running 8% above last year's pace. Meanwhile, non-labor expenses — think supplies and drugs — are driving expense growth that continues to outrun inflation.
On the volume side, there were bright spots: ED visits rose 2% from May and 4% year-over-year, adjusted discharges climbed 5%, and outpatient revenue jumped 8% month-over-month.
By the Numbers:
Why it matters: Hospitals serving the most vulnerable patients are bearing the brunt of shifting payer mixes and rising uninsured populations. Without proactive expense management and strategic planning, these financial headwinds could threaten care access for those who need it most.
