This report highlights the latest trends in financial performance for U.S. hospitals and physician groups, drawn from monthly data from more than 149,000 providers and over 2,200 hospitals.
Published September 30, 2026
August’s data paints a mixed picture. Health system operating margin climbed to a year high, while patient volumes declined from July. Lower supply and drug expenses helped ease cost pressure, though total expenses remain elevated year over year.
August 2026 data highlights:
Health system operating margin growth climbed to a national median of +1.0%, a new peak for the year.
Patient volumes declined overall compared to last month, with outpatient visits dropping 4.3% and inpatient admissions down 1.5%.
Hospitals’ inpatient and outpatient revenue also saw decreases: outpatient was down 2.7% and inpatient was down 0.6%.
Total expenses dipped month over month (including supply costs at -4.7% and drugs expenses at -6.5%) but are still up 5.6% year over year.
Hospital Performance Benchmarks
| Hospital KPIs from Comparative Analytics | ||
|---|---|---|
| Change from previous month | Change from previous year | |
| Operating Margin* | ▼ -0.1% | ▼ -0.2% |
| Total Expense | ▼ -1.2% | ▲ +5.6% |
| Total Non-Labor Expense | ▼ -2.3% | ▲ +5.8% |
| Outpatient Revenue | ▼ -2.7% | ▲ +9.9% |
| Inpatient Revenue | ▼ -0.6% | ▲ +6.4% |
| Gross Operating Revenue | ▼ -1.7% | ▲ +8.8% |
| Labor Expense | ▼ -0.1% | ▲ +5.3% |
*Note: Operating margins are calculated on a percentage point change basis. The table above reflects individual hospital performance, which may or may not include enterprise-level operating or administrative expense.
Operating Margins: Health system operating margins grew 1.0%, reaching a new high for the year, after a slight decline in July. At the individual hospital level, operating margin remained fairly stable, declining just 0.1% from last month and 0.2% compared to last year.
Hospital Expenses: Total expenses declined 1.2% month over month, while still up 5.6% compared to last year. Total non-labor expenses followed a similar pattern, falling 2.3% from July, while remaining up 5.8% year over year. Supply expenses, typically one of hospitals’ largest expense categories, declined 4.7% month over month but remain up 7.2% year over year. Drug expenses also eased, decreasing 6.5% month over month, while remaining 7.6% above the prior year.
Hospital Revenues: Gross operating revenue dipped 1.7% month over month but remains up 8.8% year over year. Both inpatient and outpatient revenue declined from July. Inpatient revenue saw a slight dip of 0.6% compared to last month but remains up 6.4% year over year. Outpatient revenue saw a greater decrease, dropping 2.7% compared to last month, but remains up 9.9% year over year.
Source: Comparative Analytics
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Hospital inpatient and outpatient volumes are drawn from analysis of more than 10 million patient visits.
| Patient Volumes from StrataSphere | ||
|---|---|---|
| Change from previous month | Change from previous year | |
| Inpatient Admissions | ▼ -1.5% | ▲ +4.1% |
| Observation Visits | ▼ -2.9% | ▼ -1.3% |
| Emergency Visits | ▼ -3.8% | ▼ -2.1% |
| Outpatient Visits | ▼ -4.3% | ▲ +3.2% |
Hospital volumes: Patient volumes declined overall in August. Inpatient admissions decreased 1.5% compared to last month but remained up 4.1% year over year. Outpatient visits also dropped 4.3% month over month but are up 3.2% year over year. Emergency visits also continued to trend lower, declining 3.8% month over month and 2.1% year over year. This sustained decline in emergency visits may point to a shift toward other care settings.
A look at last month's key performance indicators from more than 10,000 physician practices.
| Physician KPIs from Comparative Analytics | ||
|---|---|---|
| Change versus 2025 | Change versus 2024 | |
| Investment | ▲ +0.6% | ▼ -1.3% |
| Total Direct Expense | ▲ +3.3% | ▲ +6.7% |
| Productivity | ▼ -3.3% | ▼ -2.3% |
| Physician Revenue | ▲ +7.6% | ▲ +9.5% |
| Support Staff Levels | ▲ +3.6% | ▲ +2.5% |
“Investment” measures per-physician profitability from patient care: net patient revenue minus total operating expenses, divided by physician FTEs. “Support Staff” includes all ancillary, business operations, clinical support, and front office personnel.
Physician practice expenses & productivity: Physician revenue increased 7.6% compared to 2025 and 9.5% compared to 2024, outpacing direct expenses that saw increases of 3.3% versus 2025 and 6.7% versus 2024. And, at the same time, productivity maintained a downward trend, decreasing 3.3% from 2025 and 2.3% from 2024.
In August, health system operating margins reached a new high for the year as supply and drug expenses declined, but patient volumes and revenue softened from July. At the same time, expenses remain elevated year over year, though physician revenue growth outpaced practice expenses despite declining productivity. That combination is likely to keep leaders focused on sustaining margin gains while closely monitoring volume, expense, and productivity trends.
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Explore the previous monthly report to compare historical insights.
