Advisory Board researchers examined hospital financial performance as we approach 2026, with attention to revenue trajectories, cost pressures, margin dynamics, and policy impacts. Our findings highlight persistent margin constraints from labor costs and reimbursement pressures — and the likelihood of meaningful shifts in future demand.

While financial performance has steadily improved, the road ahead diverges sharply. Fundamentals and exposure to policy shifts vary widely across organizations, setting up a landscape where not all hospitals are equally prepared for 2026. Our overall findings show collective improvement on finances but diverging future potential based their unique business fundamentals and varying exposure to legislation.