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 providers and over 2,200 hospitals.
Published October 30, 2026
September’s data shows continued margin strength along with shifting operational trends. Operating margins held steady at the year’s peak, supported by relatively stable total expenses, while outpatient activity and revenue increased. Yet rising non-labor costs and declining physician productivity remain challenges.
September 2026 data highlights:
Health system operating margin growth remained steady at a national median of +1.0%, staying at the peak for the year.
Outpatient visits rebounded this month, up 3.0%, but inpatient admissions, observation visits, and emergency visits all saw declines.
In alignment with patient volume fluctuations, outpatient revenue increased 1.3% and inpatient revenue declined 1.4% compared to last month.
Total expenses remained steady, dipping just 0.2% compared to last month, but remain up 3.8% year over year.
| Hospital KPIs from Comparative Analytics | ||
|---|---|---|
| Change from previous month | Change from previous year | |
| Operating Margin* | ▲ +1.2% | ▲ +0.4% |
| Total Expense | ▼ -0.2% | ▲ +3.8% |
| Total Non-Labor Expense | ▲ +1.0% | ▲ +3.5% |
| Outpatient Revenue | ▲ +1.3% | ▲ +9.3% |
| Inpatient Revenue | ▼ -1.4% | ▲ +5.5% |
| Gross Operating Revenue | ▲ +0.3% | ▲ +7.7% |
| Labor Expense | ▼ -2.4% | ▲ +4.0% |
*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 held steady at 1.0%, maintaining the highest level recorded this year. At the individual hospital level, operating margin increased 1.2% from last month and 0.4% year over year, indicating continued improvement in hospital-level performance.
Hospital Expenses: Total expenses remained relatively stable, declining just 0.2% month over month while remaining 3.8% higher year over year. Total non-labor expenses moved in the opposite direction, increasing 1.0% from last month and 3.5% year over year. Labor expenses, by contrast, declined 2.4% month over month but remain up 4.0% compared to last year.
Hospital Revenues: Gross operating revenue edged up 0.3% month over month and remains up 7.7% year over year. Revenue levels varied by care setting. Inpatient revenue declined 1.4% from last month but remains 5.5% higher year over year, while outpatient revenue increased 1.3% month over month and 9.3% year over year. Outpatient revenue continues to show stronger growth than inpatient revenue.
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 | ▼ -1.0% | ▲ +4.6% |
| Observation Visits | ▼ -3.5% | ▼ -0.7% |
| Emergency Visits | ▼ -3.6% | ▼ -0.2% |
| Outpatient Visits | ▲ +3.0% | ▲ +3.5% |
Hospital volumes: Patient volume trends were mixed in September, with outpatient visits increasing while other care settings saw declines. Outpatient volumes rose 3.0% month over month and 3.5% year over year. Inpatient admissions declined 1.0% from last month but are up 4.6% compared to last year. Observation visits fell 3.5% month over month and 0.7% year over year, while emergency visits continued to trend lower, declining 3.6% from August and 0.2% year over year. The continued decline in emergency visits is part of a larger trend that may point to shifting utilization patterns across care settings.
A look at last month's key performance indicators from more than 10,000 physician practices.
| Physician KPIs from Comparative Analytics | ||
|---|---|---|
| Change from last quarter | Change versus Q3 2025 | |
| Investment | ▼ -11% | ▼ -8.0% |
| Total Direct Expense | ▼ -4.8% | ▼ -0.3% |
| Productivity | ▼ -3.5% | ▼ -5.1% |
| Physician Revenue | ▲ +2.2% | ▲ +5.6% |
| Support Staff Levels | ▲ +2.3% | ▲ +3.2% |
“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 2.2% from the previous quarter and 5.6% from Q3 a year ago. Productivity continued its downward trend, declining 3.5% quarter over quarter and 5.1% year over year. Direct expenses fell 4.8% from the previous quarter and 0.3% compared with Q3 a year ago.
The September data reinforces that margin performance is increasingly tied to how organizations manage the mix of care, not simply total volume. Outpatient activity continues to grow while inpatient and emergency utilization soften, while non-labor costs remain elevated and physician productivity declines. As these patterns persist, organizations may need to be more deliberate about where they add capacity, how they deploy labor, and which service lines and care settings support sustainable growth.
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Explore the previous monthly report to compare historical insights.
