Hospitals And Health Systems 2025 Market Report
Description
Market At-A-Glance
Spending on U.S. hospital care is projected to reach $1.8 trillion in 2025 and increase to an estimated $2.7 trillion by 2033. Meanwhile, the cost to treat on group insurance plans is projected to increase 8.5% year-over-year in 2026.
From June 2024 to June 2025, median hospital operating margins rose from 4.8% to 6.6%. However, those gains were experienced unevenly across the sector, with margins of –3 to -19% for the lowest performing hospitals while topperforming hospitals achieved margins of 29%. Policy issues including tariffs, grant reductions, and the One Big Beautiful Bill Act (OBBBA) are expected to drive hospital operating margins down further over the next several years.
Policy Changes And Tariffs Expected To Impact Hospital Margins And Supply Chains
Policy changes including tariffs, grant reductions, and Medicaid spending cuts are estimated to drop hospital operating margins by as much as 18 percentage points by 2028. In addition, health industry experts anticipate tariff-related import expenses will raise hospital costs by at least 5% within the next six months. Ninety percent of healthcare supply chain professionals believe pricing volatility linked to tariffs will disrupt procurement and contract negotiations.
Providers Anticipate Supply Chain Challenges Over The Next Year And Value Reliability In Their Supplier Partnerships
Supply disruptions, backorders and product shortages were top supply chain concerns for healthcare providers in 2024. Eighty-four percent of those providers anticipate supply chain challenges will worsen or remain the same over the next year. Hospital leaders are taking longer to make procurement decisions and seek reliability and responsiveness as the top attributes from their suppliers.
Patient Volumes Showed Improvement In First Half Of 2025
Hospital volumes showed improvement in the first half of 2025, with discharges per calendar day up 4% from the same period in 2024 and average lengths of stay down 1%. Care is expected to continue to move outpatient settings with outpatient care volumes projected to increase 18% from 2025 to 2035, while inpatient volumes will grow 5%. Demand for hospitals is increasing as the U.S. population ages, but 48% of hospital executives surveyed in 2025 said their facilities are not equipped to handle rising patient volumes.
Staff Turnover Reaches Five-Year Low, But Hospital Job Openings Expected To Rise
Average turnover rate for hospital staff in 2024 was 18.3%, the lowest rate in five years. Staff with less than one year of tenure experienced the highest rates of turnover. Driven by new job growth and retirements, healthcare jobs are projected to grow at an average rate of 1.9 million each year through 2033, faster than all other occupations.
Number Of Individuals Impacted By Healthcare Data Breaches Surged In 2024
In 2024, 725 large healthcare data breaches impacted over 275 million individuals, up 64% from 2023, when more than168 million individuals were affected by 747 breaches. The average cost of a healthcare data breach was $10.9 million in 2024, a roughly 10% decrease since 2023.
Spending on U.S. hospital care is projected to reach $1.8 trillion in 2025 and increase to an estimated $2.7 trillion by 2033. Meanwhile, the cost to treat on group insurance plans is projected to increase 8.5% year-over-year in 2026.
From June 2024 to June 2025, median hospital operating margins rose from 4.8% to 6.6%. However, those gains were experienced unevenly across the sector, with margins of –3 to -19% for the lowest performing hospitals while topperforming hospitals achieved margins of 29%. Policy issues including tariffs, grant reductions, and the One Big Beautiful Bill Act (OBBBA) are expected to drive hospital operating margins down further over the next several years.
Policy Changes And Tariffs Expected To Impact Hospital Margins And Supply Chains
Policy changes including tariffs, grant reductions, and Medicaid spending cuts are estimated to drop hospital operating margins by as much as 18 percentage points by 2028. In addition, health industry experts anticipate tariff-related import expenses will raise hospital costs by at least 5% within the next six months. Ninety percent of healthcare supply chain professionals believe pricing volatility linked to tariffs will disrupt procurement and contract negotiations.
Providers Anticipate Supply Chain Challenges Over The Next Year And Value Reliability In Their Supplier Partnerships
Supply disruptions, backorders and product shortages were top supply chain concerns for healthcare providers in 2024. Eighty-four percent of those providers anticipate supply chain challenges will worsen or remain the same over the next year. Hospital leaders are taking longer to make procurement decisions and seek reliability and responsiveness as the top attributes from their suppliers.
Patient Volumes Showed Improvement In First Half Of 2025
Hospital volumes showed improvement in the first half of 2025, with discharges per calendar day up 4% from the same period in 2024 and average lengths of stay down 1%. Care is expected to continue to move outpatient settings with outpatient care volumes projected to increase 18% from 2025 to 2035, while inpatient volumes will grow 5%. Demand for hospitals is increasing as the U.S. population ages, but 48% of hospital executives surveyed in 2025 said their facilities are not equipped to handle rising patient volumes.
Staff Turnover Reaches Five-Year Low, But Hospital Job Openings Expected To Rise
Average turnover rate for hospital staff in 2024 was 18.3%, the lowest rate in five years. Staff with less than one year of tenure experienced the highest rates of turnover. Driven by new job growth and retirements, healthcare jobs are projected to grow at an average rate of 1.9 million each year through 2033, faster than all other occupations.
Number Of Individuals Impacted By Healthcare Data Breaches Surged In 2024
In 2024, 725 large healthcare data breaches impacted over 275 million individuals, up 64% from 2023, when more than168 million individuals were affected by 747 breaches. The average cost of a healthcare data breach was $10.9 million in 2024, a roughly 10% decrease since 2023.
Table of Contents
23 Pages
- Executive Summary
- Market Overview
- Overall Median Hospital Operating Margins Improve, But Financial Recovery Uneven Across Industry
- Low Margins Put Rural Hospitals At Risk Of Closure, But Healthcare Leaders Remain Optimistic
- Policy Changes Expected To Impact Operating Margins With An 8 To 18 Point Decrease By 2028
- Trade Policies Contribute To Expected Increase In Hospital Costs And Supply Chain Disruptions In 2025
- Medical Costs Expected To Remain Elevated In 2026
- Hospitals Experience Rise In Patient Volumes
- Community Hospitals Increasingly Affiliated With Larger Health Systems
- Demand For Value-Based Care Drives Growth In U.S. Integrated Delivery Network Market
- Hospital Staff Turnover Hits Five-Year Low In 2024
- Nearly 2 Million Annual Healthcare Job Openings Projected Through 2033
- More Than Half Of Healthcare Professionals Experience Burnout
- Generative AI Leveraged By Four Out Of 10 Health Systems In 2024
- Few Hospitals Bill For Medical Advice Offered Through Patient Portals Despite Burden On Staff
- One In Five Health Systems Pulled Back On Telehealth In 2024
- Healthcare Data Breaches Impacted A Record-Breaking 275 Million Individuals In 2024
- Health Systems Hit Hard By Supply Chain Issues And Expect Challenges To Worsen Throughout 2025
- Reliability And Responsiveness Are The Top Qualities Hospitals Value In Healthcare Suppliers
- Hospital Acquisitions Increase From 2023 To 2024 But Remain Below Pre-Pandemic Levels
- Private Equity Interest In Healthcare Slows, Hospitals Experience The Sharpest Decline In PE Deals
- Share Of Hospital Transactions Involving Divestitures Or Financially Distressed Parties Hit Record Highs
- Clarivate Lists Top Hospital Products Sold Through Distribution
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