Butler Memorial Hospital is seen in May 2024. Butler Eagle File Photo

After a trend of improvement over the past year, financial results for Butler Health System are showing signs of stagnation, according to the most recent quarterly report released on Tuesday, May 12.

For the three-month period ending March 31, Butler Health System sustained an operating loss of $4.04 million — nearly doubling the $2.69 million loss it absorbed in the same period 12 months ago.

In the nine-month period ending March 31, Butler Health System reported an operating loss of $10.77 million, a slight improvement over the $13.39 million loss from the same nine-month period a year earlier.

Revenues in the nine-month period rose from $361.29 million in the 2025 fiscal year to $368.52 million in 2026. This was almost totally offset by an increase in operating expenses from $374.68 million to $379.29 million.

“The improvement in operating results is predominantly driven by financial improvement initiatives in payor rate negotiations offset by increased purchased services,” reads the report. “The increase in expenses were due to increased purchased services as a result of the fees related to the outsourcing of the revenue cycle function.”

Independence Health System — the merged entity which has included Butler Health System since 2023 — attributes the plateau in losses to lower-than-expected patient utilization.

“The trajectory of improved operating losses flattened into FY2026,” reads the report, referring to previous quarters where operating losses improved. “The operating loss declined as volumes improved for the quarter ended Dec. 31, 2025, but stagnated once again during the quarter ended March 31, 2026, due to softer than expected volumes.”

For the nine-month period ending March 31, the number of logged hospital discharges, 9,063, and observation cases, 2,429, for Butler Health System both lag behind where they were in the same nine-month period from 12 months earlier by 2.5% and 2.9%, respectively.

Butler Health System’s report lists two sets of numbers in its quarterly financial statements: the obligated group, which is used by lenders, and the consolidated group, which is expanded to include entities such as the Butler Health System Foundation. The numbers above reflect the consolidated group.

Although Butler Health System merged with Excela Health in 2023 to form the Independence Health System, both halves of the merged entity still form separate financial statements.

Last November, Independence Health System announced its intention to merge into the West Virginia University Health System in 2026. As part of the merger agreement, WVU Medicine will invest $800 million to modernize Independence Health facilities, including $165 million aimed specifically at upgrading Butler Memorial Hospital and associated outpatient facilities.

According to the quarterly report, both sides are seeking to finalize the merger by Sept. 30.