Home Economy Economic Activity Brown Health cites higher costs, lower patient volumes for $18.8M Q2 loss

Brown Health cites higher costs, lower patient volumes for $18.8M Q2 loss

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PBN Staff

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05/20/2026

BROWN UNIVERSITY Health, parent of Rhode Island Hospital, pictured above, reported an $18.8 million operating loss in the second quarter of its 2026 fiscal year. / COURTESY BROWN UNIVERSITY HEALTH

PROVIDENCE – Brown University Health on Tuesday reported an $18.8 million operating loss in the second quarter of its fiscal year 2026 as an increase in operating revenue wasn’t enough to offset lower patient volumes, sharply rising labor and supply costs and losses in nonoperating activities. The state’s largest hospital group had recorded an operating

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PROVIDENCE – Brown University Health on Tuesday reported an $18.8 million operating loss in the second quarter of its fiscal year 2026 as an increase in operating revenue wasn't enough to offset lower patient volumes, sharply rising labor and supply costs and losses in nonoperating activities. The state's largest hospital group had recorded an operating income of $8.8 million in the same quarter a year ago. Brown Health's absorption of Brown Physicians Inc. last October was a major factor behind both the higher revenue and the higher expenses in the quarter that ended on March 31. Brown Physicians, a large multispecialty physician practice with hundreds of doctors, contributed $50.3 million in patient revenue for the second quarter but also accounted for $62.5 million in compensations and benefits expense. In unaudited financial documents released Tuesday, Brown Health posted an overall operating revenue of $1.18 billion for the three-month period, an increase of $95.9 million, or 8.8%, over the same period in 2025. Operating expenses increased 10.2% year over year to $1.2 billion while compensation and benefits costs climbed 9.7% to $667.7 million. Patient service revenue grew 5.2% year over year to $970 million. However, lower patient volumes reduced revenue by $14.4 million, while higher denials, bad debts and charity care cut revenue by $11.8 million. Brown Health said these issues were partly balanced out because the health system was paid higher rates for services, provided a more profitable mix of care and received an additional $1.2 million in Medicaid support payments. Expenses from operating supplies and purchased services rose $56 million – or 15.5% – year over year, $22 million of which Brown Health blamed on higher prices for everyday supplies and services. Expanding retail and contract pharmacy businesses also increased costs by $14.8 million, with increased information technology accounting for another $10 million increase. Pharmacy revenues grew to $125.6 million, an increase of $31 million from the second quarter of 2025. Meanwhile, losses from nonoperating activities outside Brown Health's core day-to-day business amounted to $5.9 million compared with nonoperating gains of $1.9 million in the second quarter of 2025.