More hospitals are missing payroll in 2026 than in 2025, and more hospital leaders are warning that they may not be able to pay staff, according to Becker’s coverage over the last three years.
So far in 2026, Becker’s has reported on four hospitals that delayed payroll or ran into payroll problems. It reported two such hospitals in all of 2025 and four in 2024.
Most recently, employees at Sharon (Pa.) Regional Medical Center were paid after the hospital missed two consecutive pay cycles in October. In September, Vista Medical Center East, part of Waukegan, Ill.-based Vista Health System, said a banking issue that affected some employees’ paychecks had been resolved.
In Illinois, Granite City-based Gateway Regional Medical Center faced cash flow issues that delayed payroll for more than 600 employees in August. Wagoner (Okla.) Community Hospital delayed paychecks due March 13.
Four other hospitals and health systems have said in 2026 that payroll is at risk, that they barely made it or that they needed outside money to cover it. Two hospitals made similar warnings in 2024.
Industrywide finances help explain the change. The national median hospital operating margin fell to 1.8% in August, down 2 percentage points from the year before and down from 5.6% in June, according to Kaufman Hall data. About 43% of U.S. hospitals are now operating at a loss. Bad debt and charity care rose 13% year over year in August and 49% over three years. Payer mix has also eroded since the enhanced ACA premium tax credits expired at the end of 2025.
Costs are outpacing revenue, according to Kaufman Hall. Hospital expenses per day are up 21% since 2023: drug costs rose 29%, supply costs are up 25% and labor costs increased 16%.
In 2024 and 2025, leaders often pointed to one-off mistakes like missed wire transfers, payroll processing delays or a federal clerical error. In 2026, they more often point to cash flow: slow or denied payments, problems with billing systems and delayed government money.
Repeat cases
Several hospitals have missed payroll more than once or shown up in Becker’s payroll coverage in more than one year, including Sharon Regional, which missed two October paydays.
Vista Medical Center East paid workers late in March and April 2026, which it blamed on delays in payroll funding. In September, employees’ paper checks bounced for insufficient funds. The system said the September problem was a banking issue that has since been fixed.
Wagoner Community Hospital delayed its March 13 payroll and cited “soft business deposits” from insurers, patients and government reimbursements. In 2025, the city council approved a $350,000 emergency loan to cover payroll after a federal funding delay.
Martins Ferry-based East Ohio Regional Hospital’s payroll was delayed in August 2024 after a bank missed a wire transfer, and again in December 2024 because of a payroll processing issue the hospital cited. In March 2025, employees planned a protest after another missed payday. The owner said he had been unsuccessful in getting money from lenders on time.
What leaders say is behind it
Revenue cycle breakdowns: Oak Park, Ill.-based West Suburban Medical Center paused all patient care in March amid payroll challenges. A spokesperson said a new EHR had never worked correctly and that billing and collection problems left the hospital running on “a fraction of the revenue it needs.” The hospital later announced about 500 layoffs. Gateway, which also cited cash flow issues, is switching to a new revenue cycle management company.
Denials, underpayments and payer mix: Roseland Community Hospital in Chicago met its June 30 payroll only because CountyCare paid a large batch of claims in time. CEO Tim Egan said one managed care organization paid about $4,672 on roughly $133,817 in billed charges. He estimated days cash on hand at negative 65. “Every dollar that comes in is spoken for before we receive it,” he said. The hospital has since filed for Chapter 11 protection.
Slow government payments: Watsonville (Calif.) Community Hospital assured staff that October payroll was covered, but an August board summary said it was “difficult to forecast” how it would meet future payroll. The hospital cited a federal approval for an intergovernmental transfer program that was more than three months late. It had about eight days of cash on hand and an $85,000 daily shortfall as of Oct. 15.
Thin rural margins: Madelia (Minn.) Health has had negative days cash on hand for more than two years. CEO David Walz explained in May that the hospital saves cash specifically to cover payroll: “The day we can’t, then it’s over.” He cited revenue cycle problems, slow Medicare payments, unfavorable payer contracts and unpaid balances after the insurer UCare closed.
More pressure may be ahead. The American Hospital Association estimates that Medicaid cuts under HR 1 put more than 300 rural hospitals at risk of closure, conversion or service reductions. Watsonville’s leaders said “looming state and federal policy changes” are expected to cut its revenue further.
