---
title: "Marsh survey: Health systems tap reserves, debt and investments despite improving margins"
id: "news-news-fierce-healthcare-7950d71546a62ff78b6b9973"
canonical_url: "https://medichelpline.com/news/news-news-fierce-healthcare-7950d71546a62ff78b6b9973"
content_type: "medical_news_article"
category: "Industry"
source_name: "Fierce Healthcare"
source_url: "https://www.fiercehealthcare.com/finance/marsh-survey-examines-how-health-orgs-are-managing-capital-investment-strategies"
published_at: "2026-10-12T17:41:54.929Z"
license: "CC-BY-NC-4.0 / Informational Use"
---
# Marsh survey: Health systems tap reserves, debt and investments despite improving margins
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- **Canonical URL:** https://medichelpline.com/news/news-news-fierce-healthcare-7950d71546a62ff78b6b9973
- **Category:** [Industry](https://medichelpline.com/news/industry.md)
- **Reporting Source:** Fierce Healthcare
- **Original Source URL:** [Read Original Article](https://www.fiercehealthcare.com/finance/marsh-survey-examines-how-health-orgs-are-managing-capital-investment-strategies)
- **Published At:** 2026-10-12T17:41:54.929Z
## Executive Summary & Key Highlights
- A Marsh survey of 77 hospitals and health systems, covering nearly 200 investment portfolios, found median operating margins rose to **2%** in 2026, the highest level since 2021. - Liquidity pressures persist: **43%** of respondents expect to draw on reserves in 2026, up from **37%** the year before. - Debt and credit use are increasing: **40%** of organizations plan to issue debt in 2026 (up from 31% in 2025) and **33%** plan to draw on a line of credit. - Organizations are addressing financial stress through operational process improvements (**94%**), reduced capital expenditure (**15%**), staff or benefit reductions (**20%**) and reliance on investment portfolios (**20%**). - Capital spending trends were mixed: **46%** increased capital spending over the past year, **15%** decreased it, and **40%** reported no change. - Use of **AI** in investment functions remains limited: at least **75%** of respondents report not using AI tools for investment activities; specific uses reported include capital markets research (16%), manager due diligence (16%) and operations (11%). - Interest in AI investments is rising: pursuit of AI-focused opportunities within strategic healthcare and innovation programs nearly doubled, from **20%** in 2025 to **39%** in 2026. - Marsh (formerly Mercer) cautioned that despite margin improvements, financial performance remains “relatively thin,” and disciplined portfolio construction is increasingly important, per Meggan O’Shea.
## In-Depth Reporting & Editorial Analysis
## Survey finds modest margin gains but continued liquidity strain A Marsh survey of 77 hospitals and health systems — representing nearly 200 investment portfolios — shows modest improvement in financial performance in 2026 but persistent liquidity pressure across the sector. The report found median operating margins rose to **2%** in 2026, the highest level since 2021, yet it described overall financial performance as “relatively thin.” Marsh, formerly Mercer, drew these findings from organizations required to have at least one operating pension or insurance investment pool. The survey results appeared in a Fierce Healthcare report published Oct. 12, 2026. ## Reserves, debt and credit: how systems are funding gaps Despite margin improvements, many health systems are continuing to rely on reserves and external financing to manage operating stress. The survey found **43%** of respondents expect to draw on reserves in 2026, up from **37%** the year prior. Analysts quoted in the report said reserve usage is proving more persistent than expected, and that **investment portfolios remain a critical source of financial flexibility** for many organizations. Borrowing plans also rose. The survey reports that **40%** of respondents plan to issue debt in 2026, an increase from **31%** in 2025. Meanwhile, **33%** plan to draw on a line of credit. These moves underscore a willingness among some health systems to accept additional leverage to bridge near-term operating needs. ## Operational responses and capital spending trends Health systems are using several approaches to reduce operational strain. The most common response was process improvement, cited by **94%** of respondents. Other measures included reduced capital expenditure (reported by **15%**), staff or benefit reductions (**20%**) and leaning on investment portfolios (**20%**). On capital spending more broadly, responses varied: **46%** of organizations increased capital spending over the past year, **15%** decreased spending and **40%** reported no change. The mixed picture suggests some systems are advancing strategic projects while others trim investments to preserve liquidity. ## Investment portfolios as a source of flexibility The Marsh report emphasizes the role of investment portfolios in providing financial flexibility. With a meaningful share of organizations planning to access reserves or add debt, many are also turning to their investment pools to manage cash flow and support operations. Marsh’s healthcare practice co-leader Meggan O’Shea commented that while margins are improving, the continued reliance on reserves means “disciplined portfolio construction matters more than ever, as organizations balance risk and return to support both current needs and long-term resilience.” ## Limited adoption of AI in investment operations — but rising AI investment interest The survey explored how health systems are integrating artificial intelligence into investment and strategic programs. Use of **AI** within investment offices remains limited: at least **75%** of respondents reported not using AI tools for investment activities. No respondents reported AI being used for asset allocation, though **9%** said they were considering it. Reported AI applications included capital markets research and outlook (16%), manager due diligence (16%), operations (11%), administrative tasks or audits (7%), risk monitoring (5%), and investment policy development (2%). While day-to-day investment processes showed low AI penetration, interest in AI from an investment opportunity standpoint is growing. The survey noted that pursuit of AI-focused opportunities within strategic healthcare and innovation programs almost doubled — from **20%** in 2025 to **39%** in 2026. The report says organizations are embracing AI as an asset class or investment theme even before fully incorporating AI tools into their own investment operations. ## What this means for health finance leaders The findings suggest several tensions for finance leaders in health care. Improved median margins offer breathing room compared with the worst years since 2021, but the uptick in planned reserve draws and borrowing indicates many systems are still vulnerable to cash flow volatility. Investment portfolios have taken on a dual role: seeking return while serving as a liquidity backstop. Marsh’s framing points to an increased premium on careful portfolio design. In a setting where organizations may need both liquidity and growth, balancing risk tolerance with short-term operational needs is central to sustaining financial health. ## Context and next steps noted in the report The survey covered organizations with operating pension or insurance investment pools and reflected nearly 200 portfolios. It did not, however, report more granular outcomes such as regional breakdowns, absolute reserve levels, or the dollar volumes of planned debt issuances. The report indicates Marsh intends to continue tracking how organizations reconcile AI investment interest with operational adoption in future editions. For health system leaders, the data portrays a sector cautiously recovering on margins while still leaning on a mix of reserves, borrowing and investment strategies to navigate near-term pressures. Continued attention to portfolio construction and monitoring of AI’s evolving role in both investments and strategic programs will be focal points going forward. Source: Fierce Healthcare, Oct. 12, 2026; survey conducted by Marsh (formerly Mercer).
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