Nashville, Tenn.-based Vanderbilt Health recorded operating income of $452 million (4.7% operating margin) in fiscal 2026, compared to operating income of $255 million (3.0% margin) the year prior, according to its Sept. 30 financial report.
Six things to know:
1. The system reported operating revenue of $9.5 billion for the 12 months ended June 30, up 12% from $8.5 billion the year prior. Patient service revenue was $8.5 billion, up 14% from $7.4 billion, driven by higher surgical, procedural, ambulatory and pharmacy volumes. Academic and research revenue fell 5.3% to $786 million, which the system attributed to fewer new awards and grants and lower indirect cost recovery.
2. Vanderbilt Health reported operating expenses of $9.1 billion in fiscal 2026, up 9.9% from $8.3 billion the year prior. Salaries, wages and benefits totaled $4.7 billion, up 7.3% from $4.4 billion, as the system added staff for higher volumes and the opening of the Jim Ayers Tower at its Vanderbilt University Hospital in Nashville. Supplies and drugs totaled $2.3 billion, up 16.7% from $2 billion. Drug costs rose $235 million because of retail and specialty pharmacy growth and greater use of higher-cost drugs. Services and other expenses totaled $1.2 billion, up 7.8% from $1.1 billion.
3. The system recognized $230 million in fiscal 2026 from TennCare’s Hospital Investment Program, which provides supplemental Medicaid payments using an average commercial rate approach. In fiscal 2025, the system recognized $179 million in program revenue, all in the fourth quarter.
4. Effective Feb. 1, Vanderbilt Health acquired the remaining 80% ownership interest in Tennova Healthcare-Clarksville from Franklin, Tenn.-based Community Health Systems. The hospital, now Vanderbilt Clarksville (Tenn.) Hospital, generated $118.5 million in operating revenue and $8 million in operating income from February through June.
5. Federal direct research revenue fell 15.7% to $376.6 million from $446.5 million the year prior. Non-federal research revenue rose to $139.7 million from $114.7 million.
6. The system recorded net income of $775 million in fiscal 2026, up from $424 million in fiscal 2025.
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