Hospital bad debt and charity care are rising at unsustainable rates, and the problem is unlikely to ease any time soon.
According to Kaufman Hall’s “National Hospital Flash Report,” which analyzed hospital data from March 2026, the growth in bad debt and charity care per calendar day has outpaced year-ago levels in every region of the country and across every hospital size category. The trend is not a one-month anomaly. The first quarter of 2026 showed sustained, broad-based deterioration over the last three years, with some segments of the hospital industry absorbing increases that would have been considered extreme even in the most financially stressed periods of recent years.
Several forces are converging to drive these numbers. Medicaid redetermination — the unwinding of pandemic-era continuous enrollment protections — has left a substantial share of previously covered patients without insurance, many of whom are now presenting at hospitals for care they cannot pay for.
At the same time, commercial coverage gaps, high-deductible plan structures, and rising out-of-pocket costs continue to shift financial exposure from payers to patients and, ultimately, to providers. The result is a growing population of patients who are either uninsured, underinsured, or unable to meet their cost-sharing obligations.
The regional and size-based variation in the data reflects the uneven distribution of these pressures. States with larger uninsured populations, tighter Medicaid eligibility thresholds, and fewer safety-net funding mechanisms are bearing a disproportionate share of the load. Meanwhile, smaller hospitals — already operating with thinner margins and less financial cushion — are posting some of the steepest relative increases, raising questions about long-term sustainability.
Large academic and urban systems face their own exposure, with the biggest hospitals by bed count recording sharp single-month spikes even as their quarterly figures remain more moderate. Bad debt and charity care isn’t just a problem for safety-net hospitals; it is a mainstream financial risk spreading across the industry.
And the issue could worsen next year as additional Medicaid benefit cuts take hold.
Here are 20 things to know about hospital bad debt and charity care for the first quarter of the year.
1. Nationally, bad debt and charity care per calendar day rose 18% in March 2026 compared to March 2025, according to Kaufman Hall’s National Hospital Flash Report.
2. For the first quarter of 2026, the national increase held at 15% compared to the same period in 2025, suggesting the March spike was part of a sustained trend rather than an isolated month.
3. Measured against the first quarter of 2023, national bad debt and charity care per calendar day has grown 46%, a nearly half-century increase in roughly three years.
4. The Midwest posted the steepest year-over-year increase of any region in March, with bad debt and charity care rising 33% compared to March 2025.
5. For the full first quarter, the Midwest also led all regions with a 24% increase over the first quarter of 2025.
6. Compared to the first quarter of 2023, the Midwest’s growth of 81% was by far the largest three-year swing of any region, more than double the national rate and nearly four times the South’s increase over the same period.
7. The South recorded the most modest three-year growth of any region, with bad debt and charity care rising 22% in the first quarter of 2026 versus the first quarter of 2023.
8. In March, the South posted a 16% year-over-year increase, slightly above the national average. Its first-quarter figure of 14% was one percentage point below the national rate.
9. The Northeast and Mid-Atlantic posted the smallest year-over-year increases, with March 2026 up 10% versus March 2025 and the first quarter up just 6% compared to the prior year.
10. Despite its subdued recent growth, the Northeast and Mid-Atlantic recorded a 57% increase in bad debt and charity care comparing the first quarter of 2026 to the first quarter of 2023 — the second-highest three-year increase of any region.
11. The West and Great Plains tracked closely, both posting 15% first-quarter increases year over year and three-year growth of 42% and 45%, respectively.
12. Among hospital size categories, facilities with 500 or more beds recorded the highest year-over-year increase in March at 31%, suggesting that large academic and urban systems are not insulated from the trend.
13. Despite that March spike, 500-plus-bed hospitals reported a first-quarter increase of only 13% year over year and the lowest three-year growth of any size category at 19%.
14. Hospitals with 100 to 199 beds posted the second-highest March increase among size categories at 24% year over year, and their three-year growth of 54% was the highest of any size band except the smallest hospitals.
15. The smallest hospitals — those with 25 beds or fewer — showed a first-quarter increase of 22% year over year, the highest of any size category for that time period.
16. Over three years, hospitals with 25 or fewer beds have seen bad debt and charity care per calendar day rise 51%, reflecting the particular vulnerability of critical access and rural facilities.
17. Hospitals in the 26-to-99-bed range saw a 21% increase in March year over year and a 46% increase comparing the first quarter of 2026 to the first quarter of 2023.
18. Mid-size hospitals with 200 to 299 beds and 300 to 499 beds posted the two smallest three-year increases in the dataset at 45% and 36%, respectively, though both still represent substantial absolute growth.
19. The 300-to-499-bed category also recorded the smallest March year-over-year increase among all size groups at 8%, and its first-quarter increase of 11% was among the lowest in the data.
20. Across every region and size category in the dataset, bad debt and charity care per calendar day in the first quarter of 2026 exceeded the comparable period in both 2025 and 2023, making the growth universal rather than concentrated in any single segment of the hospital industry.
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