Cleveland Clinic recorded operating income of $245.6 million (5% operating margin) during the second quarter of 2026, down from operating income of $255.3 million (5.6% margin) during the same period last year, according to its Aug. 14 financial report.
Five things to know:
1. Cleveland Clinic attributed the narrowed operating margin to a 9.5% year-over-year growth in operating expenses for the three months ended June 30, which outpaced an 8.7% increase in operating revenue.
2. The system reported total operating revenue of $4.9 billion in the second quarter of 2026, up from $4.5 billion during the same period last year. Net patient service revenue totaled $4 billion, up from $3.7 billion. Total patient encounters increased 2.2%, driven by a 2.5% increase in acute admissions, a 1.0% increase in total surgical cases and a 2.8% increase in outpatient evaluation and management visits. Net patient service revenue also increased due to a new Ohio physician state directed payment program approved by CMS in the first quarter of 2026, as well as an expansion of the Ohio and Florida hospital state directed payment programs.
3. Total operating expenses were $4.5 billion, up from $4.1 billion. Cleveland Clinic said the growth in expenses was primarily due to growth in patient volumes and inflationary trends that increased personnel, supplies and pharmaceutical expenses. Salaries, wages and benefits totaled $2.5 billion, up from $2.4 billion. Pharmaceutical expenses totaled $772.7 million, up from $682.8 million. Supply expenses totaled $447.1 million, up from $419.3 million.
4. Cleveland Clinic had 337 days cash on hand as of June 30, up from 323 on Dec. 31.
5. The system reported a net income of $1 billion in the second quarter of 2026, up from $763.2 million during the same period last year.
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