U.S. hospitals’ revenue and operating margins looked a lot better in the first half of this year than in the first half of 2024, according to Strata Decision Technology hospital financial system data compiled by Kaufman Hall, a Vizient company.
Hospitals’ overall revenue was 7% higher in the first half than in the comparable period in 2024, and operating profits were 3% higher.
Operating profit margin figures were available only by month. Median profit margins increased to 3% in June 2025, from 1.3% in June 30.
What it means: Inpatient and outpatient hospital services account for about half of spending at a typical employer-sponsored health plan, according to the breakdowns Milliman, an actuarial consulting firm, uses to create its employer plan cost index reports.
If hospitals are doing better, that could reduce the pressure they face to negotiate for much higher reimbursement levels in 2026.
Moderating health care provider fee increases could, in turn, hold down increases in costs for fully insured coverage and for stop-loss insurance, or arrangements that help employers’ self-insured plans manage unexpected spikes in claims.
The analysts’ take: Erik Swanson and other Kaufman Hall analysts said the new numbers show that high-performing hospitals are generating more outpatient revenue.
Those thriving hospitals are “leveraging their outpatient footprint and diversifying services,” the analysts said.
The figures imply that typical employer plans could see a bigger increase in outpatient claims than in inpatient claims this year.
Kaufman Hall has very early revenue figures, and its analysts are not yet speculating about the reasons for the increase in outpatient revenue.
Some of the drivers could include the recent waves of upper respiratory infections; the aging of the U.S. population; hospital billing strategy changes; patients trying to get elective care before a cooling economy or federal policy changes affect their coverage, and the impact of federal No Surprises Act coverage requirements.
The future: One challenge for hospitals and plans is that changes in federal Medicaid and Medicare rules and reimbursement strategies could lead to big decreases in the amount of hospital revenue coming from public plan patients in 2026.
That could make 2026 revenue figures look much different from the current-year figures and push hospitals to negotiate for much bigger employer-plan reimbursement rate increases than the current-year operating margins would suggest are needed.