A national report on hospital finances published by Kaufman Hall National Hospital Flash Report (January 2026 Metrics) reveals that hospitals nationally are under serious strain. In Oregon, the situation has been trending in the wrong direction for years.
When hospitals lose money year after year, something eventually gives, including service cuts and hospital closures. This is not a hypothetical in Oregon.
The latest Kaufman Hall National Hospital Flash Report, which is a closely watched industry analysis drawing on data from more than 1,300 hospitals nationwide, confirms that the financial pressures on hospitals are persistent and getting worse.
Hospitals are earning less than it costs to care for patients
Hospital operating margins, which is the difference between what a hospital earns from patient care and what it spends to deliver that care, is one of the most direct measures of financial health for any health care system.
Nationally, Operating Margins have been shrinking for years. The Kaufman Hall report shows the national median has fallen to just 2.1%, and it has declined 17% compared to a year ago. What this means practically is that for every $100 a typical U.S. hospital earns, it keeps just $2.10 after paying its bills.
In Oregon, even that thin margin is out of reach. The statewide hospital operating margin was negative 1.0% as of the third quarter of 2025, meaning Oregon hospitals, on average, are spending more than they earn from patient care. The state’s hospital operating margin in 2024 was just 0.3%, compared to 1.2% nationally. Oregon hospitals have been underperforming the national average since at least 2018 and show no signs of closing the gap.
The cost of running a hospital has surged with no end in sight
Hospitals nationwide have seen their day-to-day operating costs rise 18% over the past three years. Drug costs are up 31% and medical supply costs are up 25% over the same period. These are not discretionary expenses – hospitals cannot choose to skip medications or run short on surgical supplies.
Labor is the biggest cost for most health care systems, and it has grown sharply year over year. In Oregon, this pressure is more acute than in most states. Hospital staffing laws requiring minimum nurse-to-patient ratios have real costs attached.
Further, Oregon’s largest health systems have locked in some of the steepest wage increases in the country. These costs are now permanent fixtures in hospital budgets that are already under severe pressure.
Uncompensated care is growing and shifting the burden
Even as costs climb, hospitals are being paid for a shrinking share of the care they provide. Nationally, uncompensated care – bills that go uncollected or care provided for free to patients who cannot afford it – has grown 40% since 2023 and continues to accelerate. This change reflects the reality that more people are arriving at hospitals without adequate insurance coverage and without the means to pay.
Oregon faces a compounding version of this problem. Roughly a quarter to one-third of patients at many Oregon hospitals are enrolled in Medicaid, which reimburses hospitals at rates consistently below the actual cost of care. Enacted federal cuts to Medicaid will worsen this situation substantially in the coming years.
The consequences are already unfolding
These financial trends are not hypothetical. Oregon’s only long-term acute care hospital announced its closure in late 2025. Facing unsustainable cost pressures, Asante’s own Ashland Community Hospital intends to give up its inpatient license this year. A statewide risk assessment has identified additional hospitals that may face closure if trends do not reverse.
Oregon already has the second-fewest hospital beds per capita of any state in the country. The state cannot afford to keep losing capacity. But without meaningful changes to how hospitals are funded and what they are required to spend, the financial math points in the wrong direction.
The national data from Kaufman Hall and local data from the Hospital Association of Oregon and the Oregon Health Authority point to the same place: a hospital system that has been under compounding financial pressure for years, is now approaching a breaking point, and will require serious policy action to stabilize.
The closures and service reductions already underway are not the end of this story. Without intervention, they are the beginning.
Sources
- Kaufman Hall & Associates, LLC. National Hospital Flash Report: January 2026 Metrics. Based on data from more than 1,300 hospitals. Strata Decision Technology. 2026.
- Oregon Health Authority. Oregon Acute Care Hospitals Financial Trends Q3 2025. Published February 9, 2026. oregon.gov/oha
- Hospital Association of Oregon. Oregon Hospitals on the Brink: 2024 Hospital Utilization and Financial Analysis. April 2025. oregonhospitals.org
- OPB / Think Out Loud. “Most Oregon hospitals now in jeopardy, according to report.” May 6, 2025. opb.org
- “Oregon hospital revenues rebound, but costs also surge.” March 23, 2024. opb.org
- Grants Pass Tribune. “Oregon hospitals confront a precarious financial crossroads as 2026 approaches.” December 6, 2025. grantspasstribune.com
