Key Takeaways
- March was the best month for hospitals in 2026 so far, despite mixed volumes. Month-over month discharges rose while patient days fell, indicating increased focus on improving average length of stay and a continued shift to outpatient care.
- Operating margins improved month-over-month but remain below 2025. While bad debt and charity care declined month-over-month, gross revenue continues to outpace net, highlighting eroding payor mix.
- Expenses declined in March, yet remain elevated year-over-year. Favorable improvements across the board are likely correlated to the decrease in average length of stay. However, drug expenses remain a primary driver of expense growth year-to-date.
- Two notable outliers emerged in otherwise steady regional trends. The Northeast saw margin improvement, despite historical underperformance, while the West experienced the most dramatic increase in drug expense.
To view more insights on trends affecting hospitals and steps you can consider taking to address them, download the latest issue of the National Hospital Flash Report.
Erik Swanson is a Managing Director leading Kaufman Hall’s Data and Analytics Group where he focuses on providing cutting-edge data science tools to our clients to provide deeper and more timely insight, drive operational improvement, develop thought leadership, and produce the most meaningful outcomes.
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