Hospitals and Health Systems Lost 10% of Net Revenue to Bad Debt and Insurance Denials in 2025, or More Than $132 Billion, According to a New Kodiak Solutions Analysis

The returns from investing in AI and other information technology to stem net revenue leakage have plateaued, underscoring the need for data insights that drive financial performance

INDIANAPOLIS--(BUSINESS WIRE)--The 2,400 hospitals and 375,000 physicians on the Kodiak Platform lost $52.1 billion in net revenue to write-offs for bad debt and final insurance denials in 2025, up 17.6% from 2024, according to a new analysis of proprietary data.

Extrapolated to the 6,100 hospitals in the United States, Kodiak estimates net revenue leakage of $132.2 billion in 2025.

Write-offs for bad debt and final insurance denials for hospitals on the Kodiak Platform equaled 10% of net revenue in 2025, flat with 2024, according to Kodiak’s analysis. Through October, leakage remains at 10% in 2026.

The plateau in performance comes as hospitals continue to invest billions of dollars in information technology systems, especially those powered by artificial intelligence, to improve revenue cycle management with the goal of improving financial performance.

“Revenue cycle leaders must view information technology, including AI, as no more than table stakes for improving financial performance,” says Matt Szaflarski, Vice President, Revenue Cycle Intelligence, at Kodiak Solutions. “Some investment is necessary to sit at the table and play the game, but to succeed, revenue cycle leaders need to focus on the capabilities needed to optimize financial performance.”

To make the most of investments in revenue cycle automation and other information systems requires having data-driven insights into the factors causing net revenue leakage and missed projections, as well as the impediments to converting net revenue into cash collected, Szaflarski adds.

For more data and analysis, download the full Kodiak Platform Benchmarking Analysis for the fourth quarter, “The revenue cycle performance plateau.”

About Kodiak Solutions

Kodiak Solutions is a leading technology and tech-enabled services company that simplifies complex business problems for healthcare provider organizations. The Kodiak Platform is a strategic platform for the Office of the CFO, bringing together data, intelligence, capabilities, workflows and expertise to power solutions across financial reporting, reimbursement, revenue cycle, risk and compliance, and unclaimed property. Kodiak Net Revenue Automation (RCA), our proprietary net revenue reporting solution developed over the past two decades, is part of the Kodiak Platform. Kodiak’s 500 employees engage with more than 2,400 hospitals and 375,000 practice-based physicians across all 50 states and serve as the unclaimed property outsourcing provider of choice for more than 2,000 companies. To learn more, visit Kodiak’s website.