Published 5:30 am Saturday, August 8, 2026
St. Charles Bend
(Dean Guernsey/The Bulletin)
Oregon hospitals lost $450 million in 2025 and continue to report extremely low profit margins as the One Big Beautiful Bill Act begins to make tectonic shifts in how healthcare is funded in Oregon and across the nation.
On July 29, the Hospital Association of Oregon released a 2025 hospital utilization and financial analysis that showed patient accessibility to care is at risk at hospitals across Oregon as rising expenses, lower reimbursement rates, contradictory insurance payouts and challenging state policies have pushed hospitals deeper into a financial crisis.
“After five years of losses at many of our hospitals, the consequences are impossible to ignore,” said the president and CEO of the Hospital Association of Oregon, Becky Hultberg. “Communities are losing services, patients have fewer options for care and more than 1,000 Oregonians have lost their jobs.”
The statewide average operating margin in 2025 was a loss of .5%, and more than 80% of hospitals operated at unsustainable profit margin levels, according to the association’s report.
The St. Charles Health System finished 2025 as one of the few hospitals in the state with a positive operating margin of 0.3% – still it was a profit number that was cut in half from 2024.
Hospitals operating at a profit margin lower than 5% may signal financial challenges, according to the Kaiser Family Foundation.
“We know that health care will continue to be a top priority conversation at the state and national level because the costs of care are too high for patients, while hospitals and independent providers continue to struggle to make a sustainable operating margin and access to care is continually threatened,” said Kayley Mendenhall, a spokesperson for St. Charles Health System. “Quite simply, something needs to shift.”
At a loss
Hospitals need to operate at a profit to continue to maintain equipment, add new services, keep buildings up to code and do renovations when physical space no longer fits their needs
“Sometimes what communities needed 20 years ago isn’t the same service that that community needs today,” Hultberg said. “In order to meet that need, you have to have a positive margin to be able to invest in those services.”
However, the increase in medical supplies and labor costs and the decrease in insurance and Medicare payouts has made it difficult for hospitals to operate in the black.
Oregon hospitals lost $3.2 billion serving Medicare patients in the last year alone, while and operating expenses have increased by 57.5% from 2020 to 2025, according to an analysis by the the Hospital Association of Oregon.
Salaries at St. Charles rose by an average of roughly 16.9% and medical supply costs rose by 25.6% from 2024 to 2025. As costs continue to rise, so too do the needs.
St. Charles saw total patient encounters increase by 21.4% — or 250,000 people — from 2024 to 2025.
The health system needs to increase their bed capacity, especially in Bend and Redmond, by 66.6% by 2050 to accommodate estimated population increases across Central Oregon, according to the organization.
“While the need is very real, it’s important for our community to understand that building for health care is incredibly time and resource intensive and involves many hurdles from a regulatory standpoint,” Mendenhall said. “We will need community support to ensure we can meet the health care needs of the region into the future.”
More, sicker patients
The health system anticipates that cuts associated with One Big Beautiful Bill Act will continue to drive up hospital visits as people lose access to healthcare coverage and preventive care declines.
“When people lose health care coverage, they don’t stop getting sick or needing care – they often just delay being seen by a doctor until they are very sick,” Mendenhall said. “We anticipate that we will see more, sicker patients in our emergency departments — which are already often full today — and those patients will need a higher level of care when they do come through our doors.”
To create the funds needed to reinvest in the health system St. Charles has entered partnerships with the Central Oregon Health Council, Oregon Health & Science University, Mosaic Community Health and Deschutes County Health Services to expand services across Central Oregon.
Recently the health system handed over management of their inpatient rehabilitation center to for-profit healthcare company LifePoint, effective Aug. 1. The transition will expand inpatient rehabilitation capacity at the new Susan A. Ellings Inpatient Rehabilitation Center.
“We’ve been partnering with the Lifepoint team and are excited about the operational improvements the team is providing to the service, which will be a benefit to patients,” said Alandra Johnson, spokesperson for St. Charles. “We are also excited about the progress of the Susan A. Ellings Inpatient Rehabilitation Center, which is on track to open later this year and will expand inpatient rehabilitation capacity.”
The health system would not disclose if the 12 occupational, speech, and physical therapists who previously worked in the unit were moved to another section of the hospital or if Lifepoint has hired new employees.
As hospitals continue to find creative ways to stay afloat amid a financial crisis in healthcare the Hospital Association of Oregon is recommending that policymakers protect and strengthen Medicaid payments to hospitals, reduce unnecessary administration or bureaucracy and hold insurers accountable to prevent further losses.
“Every single hospital in rural Oregon is important, and we want to help and do the best we can to keep all of those hospitals viable,” Hultberg said.
Have you experienced a recent loss of healthcare coverage or have struggled with late or denied insurance payouts? Healthcare reporter Emily Rogers is working on a story about the changes to health insurance and the way the One Big Beautiful Bill is impacting local’s access to care. If you would like to share your story you can contact Rogers at emily.rogers@bendbulletin.com
