Advocate Health started 2026 with a $380.1 million operating income (3.7% operating margin), up slightly from the $329.1 million (3.6% operating margin) it recorded during 2025’s first quarter.
The nation’s third-largest nonprofit health system reported this week a 10.8% year-over-year boost in Q1 total revenue, reaching nearly $10.2 billion. That slightly outpaced a 10.6% growth in total expenses, which neared $9.8 billion during the most recent quarter.
Compared to the prior year, Advocate managed to boost its patient throughput despite a slight uptick in complexity. Discharges were up 1.9%, as were observation cases by 4.4%. At the same time, average inpatient length of stay dropped by 1.8% while case mix index rose 0.6%.
Advocate also outlined a 0.3% year-over-year increase in its tally of inpatient surgeries and a 4.1% jump in outpatient surgeries, though its ED visits took a 3.8% hit that mirrors a seasonal trend highlighted by many other large systems for the first quarter. Physician productivity (as measured by work relative value units) grew by 5.3%.
Advocate’s filing did not break down how heavily the increased volumes weighed in its revenue growth as opposed to other factors like payment rates, though it did outline a downward shift in its payer mix where commercial patient service revenue fell from 51% to 46% while Medicaid grew from 17% to 22%.
Joining the system’s year-over-year operating improvements was heightened net investment income ($276.3 million) and resulting net non-operating income ($271.8 million). Together, Advocate boosted its Q1 bottom line from 2025’s $499.5 million to $640.9 million in 2026.
Advocate Health operates 69 hospitals and over 1,000 total sites of care across its six-state footprint, employing around 167,000 people and hauling in over $38.9 billion of total revenue across the entirety of 2025. Its leadership has spoken glowingly of the system’s formative cross-market merger in 2022, which joined Advocate Aurora Health and Atrium Health, as a driver of substantial operating savings and market growth.
That logic appears to be fueling another consolidation, with the Atrium Health unit this past month announcing plans to absorb North Carolina’s WakeMed Health in exchange for a $2 billion investment.
Leaders of both organizations are pushing for the combination despite concerns from local leaders and a substantially greater counteroffer from nearby UNC Health. The partners said their consolidation plans could create 3,300 new jobs over half a decade while increasing access to care and providing new clinical training opportunities through the Atrium-affiliated Wake Forest University School of Medicine.
Per this week’s financial filing, Atrium Health alone grew its acute and medical group volumes year over year while improving its operating income from $166.3 million to $210.2 million. The volumes fueled an 11% bump in revenue alongside additional Medicaid supplemental program funding, per the filing.