Hospitals’ margin recovery faces major setbacks

Becker’s Hospital Review – Monday, October 13, 2025
By Alan Condon

Many nonprofit hospitals and health systems have made steady progress on financial turnarounds since the end of the COVID-19 pandemic — though others continue to struggle — but new and persistent challenges threaten to derail those efforts.

Operating margins have inched upward across the sector, yet most remain far below the pre-pandemic “magic number” of 3%. The latest data from Strata Decision Technology shows that health system margins improved slightly to 1% in August, up from 0.9% in July, but remain relatively unchanged for the year.

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