While the nation’s largest for-profit health systems largely posted solid gains in the third quarter, major health insurers faced mixed results, with some reporting significant losses and others weathering margin pressures amid rising medical costs.
Becker’s compared third-quarter financial performance across four major for-profit hospital operators — HCA Healthcare, Tenet Healthcare, Community Health Systems and Universal Health Services — and six major payers: UnitedHealth Group, Cigna, Elevance Health, CVS Health, Centene and Humana.
Hospitals: Volume rebounds, cost controls boost profitability
All four hospital chains saw improved performance in Q3, helped by stronger volumes, favorable payer mix and cost control efforts.
- Nashville, Tenn.-based HCA Healthcare led in net income at $1.6 billion, with an 8.6% net margin, and reported $19.2 billion in revenue, up 9.6% year over year.
- Dallas-based Tenet Healthcare posted the highest operating margin at 16.8%, though its $342 million net income was down from the previous year.
- Franklin, Tenn.-based Community Health Systems swung to profitability, reporting $130 million in net income (4.2% margin) after a $391 million loss (-4.8% margin) in Q3 2024.
- King of Prussia, Pa.-based Universal Health Services reported a $373 million net income, up 44% year over year, and an 11.6% operating margin.
Behavioral health, ambulatory services and high-acuity volumes were cited as key growth drivers, with most systems raising guidance for full-year revenue or earnings.
Payers: High revenues, mixed bottom lines
Despite higher revenues across the board, several payers struggled with elevated medical costs, Medicare funding pressures and goodwill impairments.
- UnitedHealth Group reported $113.2 billion in third-quarter revenue — up 12% year over year — but saw net profit fall to $2.3 billion, down from $6.1 billion
- Cigna Group reported $1.9 billion in profit, up from $739 million in Q3 2024, fueled by growth at Evernorth Health Services.
- Elevance Health earned $1.2 billion in net profits, up nearly 18% year over year, with total revenue up 12% year over year to $50.7 billion.
- Humana reported a sharp profit decline to $195 million — compared to $480 million during the same quarter in 2024 — citing Medicare Advantage challenges.
- CVS Health posted a $4 billion net loss due to a $5.7 billion goodwill impairment in its health services segment, despite $103 billion in revenue.
- Centene recorded a $6.6 billion loss, driven by a $6.7 billion noncash impairment charge related to the healthcare delivery reporting unit under its health services segment. However, revenue increased 18% year over year to $49.7 billion.
Margins for most payers were compressed by rising medical loss ratios, particularly in government programs such as Medicare Advantage and Medicaid.
Key contrasts: Margins, growth drivers and headwinds
- Margins: Health systems posted stronger operating margins than insurers, with Tenet’s 16.8% standing out. In contrast, UnitedHealthcare’s margin fell to 2.1%, and several payers posted losses.
- Revenue growth: Payers such as UnitedHealth and CVS surpassed $100 billion in quarterly revenue, dwarfing hospitals, but profit margins often lagged.
- Headwinds: Payers cited elevated utilization, Medicare funding cuts and impairment charges, while hospitals pointed to favorable volumes and pricing trends.
As both sides of the healthcare industry look to 2026, the divergence in Q3 results reflects not only their differing revenue models but also growing friction between hospitals and payers — an arms race increasingly shaped by AI, value-based care and risk-sharing arrangements.
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