“While these findings are encouraging and suggest that many hospitals and health systems are making progress after several difficult years, the improvement is not universal, and a number of providers remain under financial stress,” said the agency’s executive director, Andrew Jackmauh.
Agency researchers gave no explanation for the improved financial picture for many hospitals, which have been under severe stress in recent years stemming from the pandemic, the bankruptcy of Steward Health Care, rising labor costs, and inflation.
The systems with the biggest surpluses included Mass General Brigham, the state’s largest health system and private employer, with a total margin of $2.38 billion, and Boston Children’s Hospital, with a total margin of $705 million.
Six acute hospital health systems ended the year in the red, with the biggest loss registered by Boston Medical Center, at $144.4 million. BMC is the state’s largest provider of medical care to the poor.
The more stable institutions often benefit from higher portions of patients on private insurance and better reimbursement rates, while struggling hospitals frequently treat higher proportions of Medicaid or uninsured patients.
David E. Williams, president of Health Business Group, a Boston management consulting firm, said that while hospitals are showing improved margins, “if you take out the money they make from investments, the median system is just breaking even on their main business of patient care.”
He also noted that more than a quarter of acute hospital health systems had negative total margins.
“That still shows a system that’s not so healthy,” Williams said.
Daniel McHale, senior vice president of health care finance and policy at the Massachusetts Health & Hospital Association, said the slightly improved financials are due to a combination of hospitals reining in spending and an influx of state funding.
In September 2025, Governor Maura Healey signed a bill that appropriated $122 million for acute care hospitals serving a high percentage of low-income patients, $77 million for the state’s Health Safety Net fund that reimburses hospitals for treating uninsured patients, and $35 million to community health centers and hospital-licensed health centers.
The state also gave transition money to health systems taking over hospitals following the collapse of Steward Health Care. Boston Medical Center, for instance, took over two of Steward’s struggling former hospitals, St. Elizabeth’s Medical Center, now called BMC – Brighton, and Good Samaritan Medical Center, now called BMC – South. Those hospitals reported some of the worst operating margins in the state.
“Those hospitals wouldn’t exist without that money” from the state, McHale said.
While the Massachusetts health care system saw overall improvement in 2025, McHale said the trend is unlikely to continue amid mounting financial pressures driven in part by impending changes to Medicaid eligibility.
“A barely break even point is not a terribly strong place to start in the face of what we see as a confluence of massive financial exposure and payment reductions,” McHale said.
Jessica Rinaldi/Globe Staff
Safety-net systems that care for a larger proportion of patients on government insurance are at greater risk for suffering under the Medicaid changes, which are expected to cut hundreds of thousands of Massachusetts residents off the federal insurance for the poor and disabled.
Those systems will likely see an increase in the number of uninsured patients at their hospitals. That’s particularly alarming considering that the state’s Health Safety Net, which is supposed to reimburse hospitals for the care of uninsured people, reported a $300 million deficit last year.
In June, Undersecretary of Health Amy Rosenthal said that hole could expand to $600 million by fiscal 2028.
The reduction in Medicaid enrollment is “going to put that funding shortfall into an unmanageable position,” McHale said. “It would basically break that system, leaving hospitals exposed to all the related care provided to the low-income uninsured.”
Jonathan Saltzman can be reached at jonathan.saltzman@globe.com. Marin Wolf can be reached at marin.wolf@globe.com.
