Industry
Kaufman Hall: 43% of Hospitals Operated at a Loss in August
Kaufman Hall's National Hospital Flash Report, released October 13, finds hospital margins fell sharply in August, with the average operating margin dropping to 1.8%, down from 3.8% in July and a June peak of 5.6%. The analysis, based on August 2026 data from 1,300 hospitals supplied by Strata Decision Technology, found 43% of hospitals operating in the red, up from 33% before the pandemic. Rising bad debt and charity care, payer mix erosion, and climbing drug and supply costs are cited as key drivers; bad debt and charity care per calendar day rose 13% year over year and 49% over three years. Kaufman Hall notes continued pressure may accelerate hospital partnerships and portfolio consolidation.
Why it mattersRising hospital bad debt and charity care signals growing uncompensated care burden tied to coverage losses, a trend Medicaid agencies and MCOs should watch as a leading indicator of enrollment and payer-mix disruption.