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Hospitals face 2026 with "new normal" of rising expenses and shifts in revenue mix

According to the latest National Hospital Flash Report from Kaufman Hall, a Vizient company, hospital operating margins remained stable in December with the adjusted year-to-date operating margin closing out 2025 at 1.3%, while the latest quarterly Physician Flash Report shows providers are working more but compensation and reimbursement are not keeping pace.

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Physician Flash Report: Q3 2024 Metrics

In the third quarter of this year, the median investment/subsidy per physician was $304,312—rising above $300,000 for the first time. Other expense metrics such as the total direct expense per provider FTE and labor as a percentage of total expenses increased.

Research Report

Physician Flash Report: Q2 2024 Data

Health systems are confronting a new normal of shrinking revenue and rising labor costs. In the second quarter of 2024, increased labor expenses accounted for 83.9% of total expenses. Additionally, the median investment/subsidy per provider rose 3% since Q2 2023.

Research Report

Physician Flash Report: January 2023

America's providers are more productive and seeing more patients than ever—particularly in primary care settings—resulting in an increase in revenue in the last quarter of 2022. However, increased expenses outweighed improved revenue.

Research Report

Physician Flash Report: October 2022

Physician practices continued a trend of increased productivity in the third quarter of 2022. However, despite higher volumes and increased productivity, investments/subsidies increased...

Research Report