This report highlights the latest trends in financial performance for U.S. hospitals and physician groups, drawn from monthly data from more than 135,000 physicians and over 2,200 hospitals.
June's data shows strong momentum: health system operating margins reach their year peak and outpatient volumes rebound, though supply cost pressures persist.
June 2026 data highlights:
Health system operating margin continued its climb to a national median of +0.74%, a peak for the year
Outpatient visit volumes rebounded, nearly leveling out last month’s sharp decline
Hospitals’ outpatient revenue continues to outperform inpatient: outpatient was up 5.0% this month compared to inpatient’s dip of -0.8%.
Hospital expenses dipped -0.3% since May, while supplies continued to grow, increasing 5.7% month over month (and up 10.4% year over year).
| Hospital KPIs from Comparative Analytics | ||
|---|---|---|
| Change from previous month | Change from previous year | |
| Operating Margin* | ▲ +1.2% | ▲ +0.5% |
| Total Expense | ▼ -0.3% | ▲ +6.7% |
| Total Non-Labor Expense | ▲ +2.4% | ▲ +8.2% |
| Outpatient Revenue | ▲ +5.0% | ▲ +12.6% |
*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 to 0.7% in June — this year’s peak.
At the individual hospital level, operating margin grew by 1.2 percentage points month over month and 0.5 percentage points year over year.
Hospital Expenses: Total expense rate continued its downward trend with a slight dip of -0.3% month over month, while still up 6.7% compared to last year. Notably, total labor expense was down 3.0% month over month, while up 5.5% year over year. Non-labor expense was up 2.4% compared to last month, and remains up 8.2% compared to June 2025, with supplies remaining a top expense here: increasing 5.7% month over month (and up 10.4% year over year). Drugs saw a modest increase this month compared to last, 0.7%, and remain up 5.3% year over year.
Hospital Revenues: Gross operating revenues for hospitals were up in June, both month over month (2.9%) and year over year (11.1%). In-patient revenue dipped to -0.8% compared to last month but remains up 7.4% year over year. Outpatient revenue was up 5.0% compared to May and up 12.6% over last 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 | ▼ -0.6% | ▲ +5.4% |
| Observation Visits | ▼ -2.1% | ▲ +0.6% |
| Emergency Visits | ▼ -5.3% | ▲ +2.2% |
| Outpatient Visits | ▲ +6.6% | ▲ +7.8% |
Hospital volumes: Nationally, inpatient admissions saw a modest dip this month, -0.6%, though still up 5.4% compared to June 2025. Outpatient visits rebounded month over month (6.6%) and year over year (7.8%), nearly reversing May’s drop of -8.4%.
A look at last quarter's key performance indicators from more than 10,000 physician practices.
| Physician KPIs from Comparative Analytics | ||
|---|---|---|
| Change from last quarter | Change vs. Q2 2025 | |
| Investment | ▼ -0.6% | ▲ +6.2% |
| Total Direct Expense | ▲ +1.4% | ▲ +6.8% |
| Productivity | ▲ +1.6% | ▼ -2.0% |
| Physician Revenue | ▲ +4.5% | ▲ +7.3% |
| Support Staff Levels | ▲ +0.1% | ▲ +0.9% |
“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: Looking at the second quarter, physician revenue saw increases of 4.5% month over month and 7.3% compared to last year, staying ahead of direct expense rates of +1.4% month over month and 6.8% year over year.
June’s data shows a split reality. Outpatient activity is rebounding and margins have edged back to a year high, but hospitals are still absorbing rising supply costs and uneven inpatient volume. That is pushing leaders in different directions: some are trying to accelerate operational gains now, while others are stress-testing utilization and revenue scenarios to prepare for what may come in 2027.
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Explore the previous monthly report to compare historical insights.
