Hospitals across the U.S. are showing signs of sustained financial recovery, with both operating margins and operating EBITDA margins posting significant gains compared to three years ago, according to Kaufman Hall’s most recent “National Hospital Flash Report.”
However, the pace and consistency of improvement differ sharply depending on geographic region and hospital size.
Growth Plateaus
Overall, hospital operating margins have surged 74% since 2022, with operating EBITDA margins up 60%, signaling a strong rebound from the pressures of the pandemic and labor disruptions. However, growth appears to have stalled in the near term. Month-over-month, operating margins remained flat, and EBITDA margins slipped slightly by 1%, hinting at ongoing cost pressures or seasonal softening in performance.
Mixed regional trends
The South leads the recovery with a 101% increase in operating margins and 74% EBITDA growth since 2022, underscoring strong operational gains despite a recent 5% monthly dip in operating margins. The Midwest has also posted solid year-over-year improvement (11% for operating margin, 9% for EBITDA), suggesting a steady upward trajectory.
Meanwhile, the Northeast/Mid-Atlantic and West are struggling to sustain momentum. The West saw a 10% drop in monthly operating margins and a 9% fall in EBITDA, despite respectable long-term gains. The Northeast showed only a modest year-over-year growth in both metrics but had a striking 33% monthly surge in operating margins and 29% in EBITDA — a possible sign of sharp course correction or volatility.
The Great Plains saw the biggest year-over-year jump in operating margins (23%), but its long-term EBITDA margin growth (31%) remains the weakest of any region, suggesting profitability gains there may be more fragile or narrowly driven.
Large hospitals outpace smaller hospitals in long term profitability
Hospitals with more than 500 beds are the financial front-runners. Their operating margins are up 119% since 2022 — the highest of any size category — with EBITDA margins up a robust 120%. These institutions also posted double-digit year-over-year gains and positive momentum month-over-month, suggesting advantages of scale and stability.
Mid-sized hospitals (100–299 beds), in contrast, are seeing slower margin growth, particularly in EBITDA, with 2025 vs. 2022 increases hovering around 43% to 50%. Smaller hospitals (under 100 beds) are faring better, with long-term margin growth between 59% to 68%, though some are showing short-term softness.
Here is the data from Kaufman Hall’s report, focused on the month of January:
Operating margin
Overall
Year over year: 9%
Month over month: 0%
2025 vs. 2022: 74%
West
Year over year: 4%
Month over month: -10%
2025 vs. 2022: 60%
Midwest
Year over year: 11%
Month over month: 1%
2025 vs. 2022: 58%
South
Year over year: 11%
Month over month: -5%
2025 vs. 2022: 101%
Northeast / Mid-Atlantic
Year over year: 1%
Month over month: 33%
2025 vs. 2022: 71%
Great Plains
Year over year: 23%
Month over month: -3%
2025 vs. 2022: 51%
0-25 beds
Year over year: 10%
Month over month: -4%
2025 vs. 2022: 95%
26-99 beds
Year over year: 10%
Month over month: 6%
2025 vs. 2022: 65%
100-199 beds
Year over year: 8%
Month over month: -1%
2025 vs. 2022: 43%
200-299 beds
Year over year: 3%
Month over month: 0%
2025 vs. 2022: 95%
300-399 beds
Year over year: 16%
Month over month: -3%
2025 vs. 2022: 88%
500+ beds
Year over year: 17%
Month over month: 11%
2025 vs. 2022: 119%
Operating EBITDA margin
Overall
Year over year: 4%
Month over month: -1%
2025 vs. 2022: 60%
West
Year over year: -1%
Month over month: -9%
2025 vs. 2022: 75%
Midwest
Year over year: 9%
Month over month: -2%
2025 vs. 2022: 56%
South
Year over year: 7%
Month over month: -3%
2025 vs. 2022: 74%
Northeast / Mid-Atlantic
Year over year: 1%
Month over month: 29%
2025 vs. 2022: 54%
Great Plains
Year over year: 4%
Month over month: -3%
2025 vs. 2022: 31%
0-25 beds
Year over year: 4%
Month over month: 6%
2025 vs. 2022: 68%
26-99 beds
Year over year: 2%
Month over month: 1%
2025 vs. 2022: 59%
100-199 beds
Year over year: 6%
Month over month: -4%
2025 vs. 2022: 50%
200-299 beds
Year over year: 5%
Month over month: 1%
2025 vs. 2022: 47%
300-399 beds
Year over year: 9%
Month over month: -7%
2025 vs. 2022: 72%
500+ beds
Year over year: 11%
Month over month: 4%
2025 vs. 2022: 120%