Hospital expenses shift in mid-2026: 60 key statistics

For years, hospital expense discussions were centered on labor. Staffing shortages, travel nurse premiums and wage competition absorbed much of the attention of CFOs and operations leaders. Recent data from Kaufman Hall suggest that picture has changed. Labor costs have settled into a more predictable range, while drugs, supplies, purchased services and other non-labor items have become harder to manage.

Drug and non-labor expenses are now rising faster than labor in nearly every region and across nearly every hospital size, and they leave fewer straightforward levers for leaders trying to contain spending. Labor expense growth is staying within a relatively narrow band, roughly 3% to 5% year over year regardless of geography or bed size. By contrast, non-labor and drug costs are showing far less consistency, with some categories posting double-digit gains. The result is a shift in where financial pressure is coming from.

The regional differences are also striking. Hospitals in the South are showing the most balanced expense pattern, with the major categories growing at similar rates. The West and Midwest are facing a different trend, with non-labor and drug spending increasing well above the national pace. That makes it more difficult for multi-region health systems to use a single cost strategy across all facilities. The data also sit against a backdrop of worsening payer mix: bad debt and charity care are rising year over year across every region and bed size, meaning hospitals are spending more while collecting less. Kaufman Hall’s National Hospital Flash Report, based on data from more than 1,300 hospitals gathered by Strata Decision Technology, provides the following snapshot of year-over-year expense growth for April 2026 compared with April 2025.

Nationally, total expense per calendar day increased 7%. Labor expense per calendar day rose 4%, while non-labor expense per calendar day increased 9% and drug expense per calendar day also climbed 9%. Purchased service expense per calendar day grew 4%.

By region, hospitals in the West saw total expense per calendar day rise 9%. Labor increased 5%, non-labor rose 13%, drug expense climbed 17% and purchased services increased 8%. In the Midwest, total expense per calendar day was up 8%, with labor up 3%, non-labor up 10%, drug expense up 9% and purchased services up 5%.

Hospitals in the South recorded total expense growth of 6%. Labor expense rose 6%, non-labor expense also rose 6%, drug expense increased 9% and purchased services climbed 2%. In the Northeast/Mid-Atlantic, total expense per calendar day was up 6%, labor rose 4%, non-labor increased 11%, drug expense rose 8% and purchased services increased 1%.

The Great Plains showed total expense per calendar day up 5%. Labor expense increased 3%, non-labor expense rose 9%, drug expense climbed 11% and purchased services increased 5%.

Hospital size also mattered. Among hospitals with 0 to 25 beds, total expense per calendar day rose 6.1%. Labor increased 3.0%, non-labor rose 7.7%, drug expense fell 0.6% and purchased services increased 2.1%. For hospitals with 26 to 99 beds, total expense per calendar day was up 7.4%, labor rose 4.2%, non-labor increased 9.8%, drug expense climbed 10.5% and purchased services rose 1.4%.

Hospitals with 100 to 199 beds reported total expense growth of 8.0%. Labor expense increased 4.3%, non-labor expense rose 9.4%, drug expense climbed 9.1% and purchased services increased 8.1%. For the 200 to 299 bed category, total expense per calendar day increased 5.1%, labor rose 4.5%, non-labor increased 7.7%, drug expense climbed 13.6% and purchased services rose 5.0%.

Hospitals with 300 to 499 beds saw total expense per calendar day increase 8.0%, labor rise 4.8%, non-labor increase 10.4%, drug expense climb 9.8% and purchased services rise 5.2%. At hospitals with 500 or more beds, total expense per calendar day increased 6.6%. Labor rose 4.0%, non-labor increased 9.2%, drug expense climbed 13.5% and purchased services rose 1.1%.

Taken together, the data point to a hospital cost environment that is no longer defined mainly by labor. Staffing remains important, but the larger pressure is increasingly coming from non-labor categories, particularly drugs, and that pressure is showing up unevenly by region and hospital size. The source did not report additional detail on what specific management actions hospitals are taking in response.