Hospital bad debt and charity care costs continue to rise nationally, with growth accelerating in several regions since 2022, according to Kaufman Hall’s “National Hospital Flash Report” released Dec. 10.
On a per-calendar-day basis, national bad debt and charity care increased 5% in October 2025 compared to October 2024. Year to date, levels are up 10% compared to the prior year and 40% higher than in 2022, underscoring the sustained pressure uncompensated care is placing on hospital finances. And many hospitals are bracing for more ahead.
“Bad debt and charity care continue to rise. This is likely due to natural demographic changes and the ongoing effects of state redeterminations of Medicaid enrollment,” the report noted. “In 2026 and beyond, the looming Medicaid provisions of H.R. 1 may likely drive this higher.”
West and Midwest see the steepest growth
The West posted the largest year-over-year increase in October, with bad debt and charity care per calendar day rising 17% compared to October 2024. Year-to-date levels are up 15% year over year and 55% higher than in 2022.
The Midwest also continues to face sharp multiyear growth. While October levels rose a more modest 5% year over year, year-to-date bad debt and charity care are up 15% compared to last year and 63% higher than in 2022 — the largest increase among regions.
In the South, bad debt and charity care per day rose 6% in October and are up 9% year to date, but growth since 2022 has been more muted at 18%. The Northeast and Mid-Atlantic region was the only area to see a year-over-year decline in October, down 2%, though year-to-date levels remain 40% higher than in 2022.
The Great Plains saw smaller increases, with a 3% rise in October, 9% growth year to date and a 28% increase compared to 2022.
Impact on revenue
While absolute bad debt and charity care dollars continue to climb, the picture is more uneven when viewed as a percentage of gross revenue.
Nationally, bad debt and charity care as a share of gross revenue declined 2% in October compared to last year but is up 2% year to date and 7% higher than in 2022.
The West again stands out as an outlier. Bad debt and charity care as a percentage of gross revenue increased 9% year over year in October, 8% year to date and 22% since 2022, signaling mounting pressure even as revenues grow.
The Midwest posted a slight 1% decline in October, but remains up 4% year to date and 29% higher than in 2022. In contrast, the South and Great Plains showed flat or declining trends. The South reported no year-to-date change versus last year and a 7% decline compared to 2022, while the Great Plains was flat year to date and down 4% since 2022.
The Northeast and Mid-Atlantic region recorded the sharpest October decline, down 14% year over year, with a 4% year-to-date decrease, though levels remain 6% above 2022.
Persistent pressure on hospital balance sheets
The data underscores the uneven financial strain hospitals face as payer mix shifts, affordability challenges persist and more patients struggle to pay for care. While some regions are seeing stabilization or modest relief when measured against revenue, others — particularly in the West and Midwest — continue to experience significant growth in uncompensated care costs.
For hospital leaders, the multiyear trend highlights the importance of revenue cycle performance, access to coverage and financial assistance strategies, and ongoing monitoring of regional dynamics as margins remain tight across the industry. Top executives are planning for the future by doubling down on unique partnerships to expand access to care, especially as ACA subsidies are set to expire and Medicaid eligibility changes.
CEOs are also focused on adding revenue generating specialties and services as well as growing philanthropic efforts to mitigate the impact of uncompensated care. Industry experts predict a more active mergers and acquisitions market in the coming years, both traditional M&A and a variety of management agreements and strategic partnerships, to keep community and rural hospitals open and smaller systems afloat.
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