US Healthcare Svcs - Hospital payroll growth continues to slow suggesting modestly slowing utilization

Research evidence excerpt

US Healthcare Svcs - Hospital payroll growth continues to slow suggesting modestly slowing utilization

7 July 2026

U.S. Healthcare Services

US Healthcare Svcs - Hospital payroll growth continues to slow

suggesting modestly slowing utilization

Supply side suggests stable and modestly slower utilization - We are seeing 1) Lance Wilkes

+1 917 344 8501 care delivery capacity growth back near historical levels and modestly decelerating; 2)

lance.wilkes@bernsteinsg.com slowing wage inflation; and modestly higher temporary labor. We expect this indicates care

delivery utilization is normalizing and continuing to modestly decelerate, while hospitals

Adam Chow and physician practices are expecting slow volume growth and are managing down labor

+1 212 845 7820

adam.chow@bernsteinsg.com costs. The modestly higher temporary labor suggests to us that providers are expecting

future volumes to be lower, thus justifying higher temporary labor rather than higher full-

time employment costs.

Implications - We see this as neutral to modestly positive for MCOs, as utilization which is

stable and closer to historic levels would be favorable to conservative pricing assumptions

but likely consistent with market expectations. We see this capacity trend as being modestly

negative for hospitals, as concerns over future volumes suggest risks to current low levels

of volume.

June payroll growth remained at lower historic levels and 2Q26 was the lowest level

of quarterly payroll growth in hospitals since 1Q2022. Payroll growth, which equates to

capacity growth, has moved down meaningfully over the past year. Total payroll growth for

hospital and ambulatory settings has dropped from a peak of 4.2% year-over-year in May ‘24

to 2.5% in June ‘26 (click here for our updated model).