Hospital economics
Are the hospitals themselves solvent?
Average hospital operating margins run -6.85% nationally, and the state spread is wide. Five years of Medicare cost reports (FY2019-2023) put the median hospital's operating margin at -2.68% and uncompensated care at $48B a year. Thin or negative margins are the leading edge of the closures and service cuts that hit access first.
The problem
Hospital solvency is uneven across the national landscape: the sector average can obscure a distressed tail where persistent operating losses, uncompensated care, payer-mix shifts, and labor pressure convert into layoffs, service reductions, or closures. The policy risk is over-subsidizing the average while missing facilities that are structurally necessary and financially fragile.
The recommendation
Build a hospital distress watchlist that combines margins with operational warning signals. The recommended approach is to pair five-year financial trends, payer mix, uncompensated-care burden, and legally reported distress events so support targets hospitals where intervention prevents access loss.
The problem
Texas illustrates why hospital finance analysis must separate solvency from uncompensated care. Margins alone can make the hospital sector look stable while the uninsured burden lands heavily on safety-net facilities, local taxpayers, and emergency departments that cannot refuse care.
The recommendation
Frame the Texas payment case around uncompensated care, not generalized hospital distress. The recommended approach is to target relief to facilities carrying the uninsured burden and evaluate Medicaid expansion, base-rate changes, or supplemental pools by whether they reduce uncompensated care as a share of operating expense.
Median hospital operating margin by state
Each cell is a state's median hospital operating margin for the selected fiscal year (the end of the year-range filter). Redder is lower (worse).
Read it this way Compare a state's cell against the benchmark shading, then move the year filter: states that stay red across all five years have a structural problem, not a bad year. A single blue year in a red run usually means COVID relief funds, not recovery. Use this chart to determine whether financial risk is broad, concentrated, or translating into distress, and why the recommendation pairs margin data with operating warning signals.
Caveat Facility operating margins are volatile year to year, so a state median is a first-pass read, not a solvency verdict on any one hospital.
⊞ data table⬇ CSV
| State | Median operating margin (%) |
|---|---|
| VT | -20.57 |
| RI | -17.5 |
| KS | -16.2 |
| NY | -14.98 |
| HI | -13.6 |
| ND | -10.64 |
| MA | -10.53 |
| AL | -9.89 |
| CT | -9.84 |
| MS | -9.17 |
| WA | -9.11 |
| AR | -8.7 |
| OK | -8.35 |
| MT | -8.23 |
| OR | -6.82 |
| NE | -6.43 |
| MD | -5.83 |
| ME | -5.78 |
| WY | -5.33 |
| WV | -4.78 |
| CA | -3.85 |
| LA | -3.41 |
| NJ | -3.33 |
| MO | -3.3 |
| MN | -3.09 |
| MI | -3 |
| CO | -2.92 |
| ID | -2.92 |
| DC | -2.46 |
| TN | -2.22 |
| IA | -2.18 |
| NH | -2.06 |
| PA | -1.69 |
| SD | -1.36 |
| IL | -1.1 |
| NM | -0.71 |
| TX | -0.39 |
| AK | -0.35 |
| OH | 0.77 |
| IN | 1.01 |
| NV | 1.4 |
| NC | 1.69 |
| WI | 1.82 |
| GA | 1.85 |
| AZ | 2.27 |
| DE | 3.14 |
| SC | 3.46 |
| KY | 3.56 |
| FL | 6.2 |
| VA | 7.32 |
| UT | 9.32 |
CMS HCRIS cost reports, FY2019-2023 (HealthPulse ingest) · 2026-06-23 · source
Operating margins, five years of cost reports
Median and mean facility operating margin per fiscal year. The mean sits far below the median because a long tail of deeply negative facilities drags it down.
Read it this way The median line is the honest headline: half of hospitals sit below it every year. Set the State filter to swap in that state's median against the national one. A state line consistently above the national median weakens any margins-based distress claim for that state. Use this chart to determine whether financial risk is broad, concentrated, or translating into distress, and why the recommendation pairs margin data with operating warning signals.
⊞ data table⬇ CSV
| Fiscal year | Median margin (%) | Mean margin (%) | Hospitals |
|---|---|---|---|
| 2019 | -2.66 | -6.01 | 6013 |
| 2020 | -4.01 | -7.6 | 5989 |
| 2021 | -2.32 | -5.34 | 5980 |
| 2022 | -4.38 | -7.75 | 5999 |
| 2023 | -2.68 | -6.55 | 6040 |
CMS HCRIS cost reports, FY2019-2023 (HealthPulse ingest) · 2026-06-23 · source
§ methodology
- Source
- CMS HCRIS hospital cost reports (Form 2552-10), FY2019-2023
- Vintage
- 2019-2023
- Denominator
- All Medicare-certified hospitals filing a cost report each fiscal year (~6,000/yr). Operating margin = operating income / net patient revenue, per facility.
- Known caveats
-
- Cost-report margins are self-reported and unaudited, and they differ from audited financial statements.
- Margins outside ±100% are excluded as filing errors. Nothing else is trimmed or imputed.
- Fiscal years vary by hospital, so 'FY2023' mixes reporting periods ending across the calendar year.
- Filters
- TimeFilterGeographyFilter
- Citation
- CMS, Healthcare Cost Report Information System (HCRIS), Hospital Form 2552-10, FY2019-2023. Accessed via HealthPulse ingest, 2026.
- Updated
- 2026-06-23
Operating margins: Texas vs the nation
Median and mean facility operating margin per fiscal year. The mean sits far below the median because a long tail of deeply negative facilities drags it down.
Read it this way The median line is the honest headline: half of hospitals sit below it every year. Set the State filter to swap in that state's median against the national one. A state line consistently above the national median weakens any margins-based distress claim for that state. Use this chart to determine whether financial risk is broad, concentrated, or translating into distress, and why the recommendation pairs margin data with operating warning signals.
⊞ data table⬇ CSV
| Fiscal year | Texas median margin (%) | National median margin (%) |
|---|---|---|
| 2019 | -0.92 | -2.66 |
| 2020 | -1.21 | -4.01 |
| 2021 | -0.52 | -2.32 |
| 2022 | -0.42 | -4.38 |
| 2023 | -0.39 | -2.68 |
CMS HCRIS cost reports, FY2019-2023 (HealthPulse ingest) · 2026-06-23 · source
§ methodology
- Source
- CMS HCRIS hospital cost reports (Form 2552-10), FY2019-2023
- Vintage
- 2019-2023
- Denominator
- All Medicare-certified hospitals filing a cost report each fiscal year (~6,000/yr). Operating margin = operating income / net patient revenue, per facility.
- Known caveats
-
- Cost-report margins are self-reported and unaudited, and they differ from audited financial statements.
- Margins outside ±100% are excluded as filing errors. Nothing else is trimmed or imputed.
- Fiscal years vary by hospital, so 'FY2023' mixes reporting periods ending across the calendar year.
- Filters
- TimeFilterGeographyFilter
- Citation
- CMS, Healthcare Cost Report Information System (HCRIS), Hospital Form 2552-10, FY2019-2023. Accessed via HealthPulse ingest, 2026.
- Updated
- 2026-06-23
Uncompensated care as a share of operating expense
Charity care plus bad debt at cost, as a share of total operating expense, FY2023. Redder is a heavier uncompensated-care load, and the benchmark is the national share.
Read it this way Red states carry more charity care and bad debt per dollar of operating expense than the national benchmark. The deepest reds cluster in non-expansion states. Move the year filter to see how stable that pattern is, and pick a state to spotlight its cell. Use this chart to determine whether financial risk is broad, concentrated, or translating into distress, and why the recommendation pairs margin data with operating warning signals.
Caveat States where fewer than 3 hospitals filed are suppressed. Territory filings outside the 50 states + DC are excluded from the map.
⊞ data table⬇ CSV
| State | Uncompensated care (% of op. expense) | Hospitals |
|---|---|---|
| TX | 9.57 | 441 |
| GA | 7.85 | 141 |
| SC | 5.98 | 62 |
| MS | 5.64 | 97 |
| FL | 5.57 | 208 |
| NC | 4.94 | 114 |
| TN | 4.75 | 117 |
| AL | 4.68 | 93 |
| NV | 4.6 | 42 |
| WY | 4.51 | 25 |
| NJ | 4.29 | 78 |
| UT | 3.53 | 50 |
| AR | 3.5 | 82 |
| OK | 3.34 | 127 |
| CO | 3.24 | 92 |
| KS | 3.21 | 130 |
| MO | 3.2 | 114 |
| VA | 3.04 | 90 |
| SD | 2.89 | 59 |
| AZ | 2.87 | 100 |
| NY | 2.83 | 174 |
| DE | 2.8 | 11 |
| ME | 2.7 | 33 |
| ID | 2.62 | 46 |
| AK | 2.59 | 23 |
| NH | 2.59 | 28 |
| LA | 2.58 | 153 |
| NM | 2.57 | 44 |
| OH | 2.52 | 188 |
| IL | 2.48 | 188 |
| MD | 2.45 | 52 |
| NE | 2.44 | 91 |
| IN | 2.35 | 147 |
| WA | 2.16 | 97 |
| WV | 2.06 | 50 |
| CT | 1.99 | 35 |
| KY | 1.97 | 97 |
| ND | 1.92 | 46 |
| IA | 1.9 | 115 |
| MT | 1.8 | 62 |
| WI | 1.76 | 139 |
| OR | 1.75 | 60 |
| MI | 1.66 | 142 |
| MN | 1.66 | 133 |
| MA | 1.61 | 79 |
| RI | 1.6 | 12 |
| CA | 1.56 | 362 |
| DC | 1.47 | 9 |
| VT | 1.47 | 16 |
| PA | 1.41 | 177 |
| HI | 0.74 | 23 |
CMS HCRIS cost reports, FY2019-2023 (HealthPulse ingest) · 2026-06-23 · source
§ methodology
- Source
- CMS HCRIS hospital cost reports, Worksheet S-10 uncompensated care
- Vintage
- 2023
- Denominator
- Hospitals filing FY2023 cost reports, aggregated to state. Share = sum of uncompensated care cost / sum of total operating expense.
- Known caveats
-
- Worksheet S-10 definitions changed over the panel, so cross-year comparisons are directional, not exact.
- State aggregates weight big systems heavily, and a single large filer can move a small state.
- Filters
- TimeFilterGeographyFilter
- Citation
- CMS, HCRIS Hospital Form 2552-10 Worksheet S-10, FY2023. Accessed via HealthPulse ingest, 2026.
- Updated
- 2026-06-23
Distress signals by type
Count of tracked financial-distress events at hospitals: WARN layoff/closure notices, Chapter 11 filings, and state financial watchlists.
Read it this way WARN notices dominate because they are legally required filings, not press coverage. Filter to a state or a year range and watch the counts recompute. A state with zero events and deep-red margins on the map above is worth a closer look, absence of filings is not absence of distress. Use this chart to determine whether financial risk is broad, concentrated, or translating into distress, and why the recommendation pairs margin data with operating warning signals.
⊞ data table⬇ CSV
| Signal type | Events |
|---|---|
| warn_layoff | 228 |
| warn_closure | 80 |
| state_watchlist | 30 |
| bankruptcy_ch11 | 26 |
HealthPulse distress-signal feed (WARN notices, bankruptcy dockets, state watchlists) · 2026-06-23 · source
The latest distress events
The twelve most recent tracked events. Effective dates can sit in the future because WARN notices are filed 60+ days ahead.
Read it this way Read this as a drumbeat, not a list: steady filings across many states is what chronic margin pressure looks like at payroll level. Filter to your state to see only its events. An empty result under the current filters is itself information. Use this chart to determine whether financial risk is broad, concentrated, or translating into distress, and why the recommendation pairs margin data with operating warning signals.
⊞ data table⬇ CSV
| Date | State | Severity | Event |
|---|---|---|---|
| 2026-08-31 | CA | medium | WARN layoff: Valley Children's Hospital (CA) · 88 affected, eff. 2026-08-31 |
| 2026-07-24 | IA | low | WARN layoff: UnityPoint Health (Marshalltown, IA) · 1 affected, eff. 2026-07-24 |
| 2026-06-30 | NY | high | WARN closure: Villa Mary Immaculate d/b/a St. Peter’s Nursing and Rehabilitation Center (SPNRC) (Albany, NY) · 133 affected, eff. 2026-06-30 |
| 2026-05-31 | NY | low | WARN layoff: The Rockefeller University Hospital (New York, NY) · 41 affected, eff. 2026-05-31 |
| 2026-05-01 | FL | medium | WARN layoff: UF Health Shands (GAINESVILLE, FL) · 139 affected, eff. 2026-05-01 |
| 2026-05-01 | FL | medium | WARN layoff: UF Health Central Florida (LEESBURG, FL) · 58 affected, eff. 2026-05-01 |
| 2026-05-01 | TN | medium | WARN layoff: Blount Memorial Hospital (TN) · 85 affected, eff. 2026-05-01 |
| 2026-04-30 | NV | medium | WARN layoff: Boulder City Hospital (Boulder City, NV) · 70 affected, eff. 2026-04-30 |
| 2026-04-25 | CA | high | WARN closure: VCA Bay Area Veterinary Specialists & Emergency Hospital (CA) · 91 affected, eff. 2026-04-25 |
| 2026-03-17 | IA | low | WARN layoff: MercyOne North Iowa Medical Center (Mason City, IA) · 34 affected, eff. 2026-03-17 |
| 2026-03-17 | IA | medium | WARN layoff: MercyOne Des Moines Medical Center (Des Moines, IA) · 67 affected, eff. 2026-03-17 |
| 2026-03-09 | CA | low | WARN layoff: Alameda Health System - Alameda Hospital (CA) · 9 affected, eff. 2026-03-09 |
HealthPulse distress-signal feed · 2026-06-23 · source
Facility profile
Every reporting hospital, one at a time: quality from Care Compare, five-year finances from its Medicare cost reports.
Pick a state, then a hospital. 51 states, 5,359 hospitals, 5,099 with a five-year finance series.
CMS Care Compare + HCRIS cost reports · 2026-06-23 · source
Why this matters
Operating losses are structural: the median hospital's Medicare share fell ~9 points in five years as enrollment shifted into Medicare Advantage, public payers reimburse below commercial rates, and uncompensated care is a fixed drain near 3.3% of operating expense. Subsidies and investment income mask the tail, so sticker-margin panic misallocates attention while genuinely failing facilities go unwatched until the WARN notice lands.
Recommended actions
- Read state median margins and the distress-signal feed together: a state red in all five years is structural, not a bad year.
- Build the watchlist from facilities with persistent negative operating margin AND a heavy public-payer or uncompensated-care mix.
- Treat WARN layoff and closure notices as the leading indicator: they are legally required filings that precede closures by months.
- Discount single-year margin swings. Require a five-year panel before any solvency claim.
- Pilot early-warning monitoring in the states that stay red across the full panel on the margin map.
The recommendation
Therefore, build a hospital distress watchlist that combines margins with operational warning signals. The recommended approach is to pair five-year financial trends, payer mix, uncompensated-care burden, and legally reported distress events so support targets hospitals where intervention prevents access loss.
Why this matters
Coverage policy determines who pays for the same patients. Where Medicaid covers fewer people, the uninsured do not disappear from hospital finances. They move onto the uncompensated-care line and into local tax subsidies. DSH and 1115 waiver pools patch the gap but are backward-looking and re-negotiated, so the 9.6% load persists year after year while margins stay deceptively healthy.
Recommended actions
- Open any Texas payment argument with the uncompensated-care share, and concede the margin picture upfront. Opponents will cite it anyway.
- Target relief at the high-uncompensated urban safety nets visible in the facility profile card, not at the average Texas hospital.
- Evaluate the instruments (coverage expansion, base-rate increases, supplemental pools) by one test: which moves the 9.6% toward the 3.3% national line fastest.
- Monitor facility-level uncompensated-care share annually from cost reports. It is the outcome variable, not a background statistic.
The recommendation
Therefore, frame the Texas payment case around uncompensated care, not generalized hospital distress. The recommended approach is to target relief to facilities carrying the uninsured burden and evaluate Medicaid expansion, base-rate changes, or supplemental pools by whether they reduce uncompensated care as a share of operating expense.
Demographic slice none. Margins are facility-level from CMS/HCRIS-derived financials. A single very negative or positive outlier can move a small state's average.
Sources
- CMS Provider Data Catalog · Hospital Care Compare · 2026-05-13
- CMS HCRIS cost reports, FY2019-2023 (HealthPulse ingest) · 2026-06-23