Oregon Health & Science University closed fiscal year 2026 with a positive operating margin of 2.2%, or $136 million — a $269 million swing from the prior year's $133 million loss and a $181 million improvement over the -1% margin the institution had budgeted, according to preliminary results released by the university.

The figures are unaudited. OHSU will present finalized, audited results to its board of directors in October, and the research award totals will also be finalized then. For R&D managers watching the institution, the headline research number is $550 million in awarded grants for the fiscal year, surpassing the previous record set in 2024.

That total landed despite what interim chief research officer Bonnie Nagel, Ph.D., described as a year that began under a pall of federal funding uncertainty. The federal government is OHSU's largest grantor, accounting for more than three-quarters of its external research funding. The feared contraction did not materialize: federal awards rose 12% year over year to $423.8 million, driven by National Institutes of Health grants. Industry funding also grew 12%, to $73.3 million.

"From the basic science working with molecules to the clinical trials working with patients, our research mission makes important discoveries for human health every day," Nagel said. "We are relieved that the federal government continued to recognize the high-value, high-impact science that happens here."

One methodological caveat sits inside the research numbers. OHSU's Award Insight Report, which tracks external funding by fiscal year, sponsor type, department and principal investigator over 12 years, changed its algorithm this year for industry clinical trial funding. The new method counts actual payments rather than estimated patient enrollment, which the university says improves accuracy but complicates direct comparison with prior-year industry figures.

The turnaround mechanics

OHSU President Shereef Elnahal, M.D., M.B.A., who joined the institution in August 2024, inherited a structural deficit: revenue at record highs, expenses growing faster. After fiscal 2025's $133 million loss, he laid out a four-part plan last September — prioritized strategic growth, aligning research and education with sustainable funding sources, negotiating better rates from insurance carriers, and coordinating with philanthropic and legislative partners.

The revenue driver was clinical. OHSU reported steady positive margins through the year, telling its board in April that it had fully reversed the prior year's operating loss for the same period. June marked the highest gross patient revenue month in the institution's history. As Oregon's only academic health center, OHSU carries the state's highest case mix index — a measure of patient complexity — and leadership framed rising acuity as evidence the referral center is functioning as intended, keeping complex cases in-state rather than sending patients to Seattle or the Bay Area. Specific examples cited include neonatal and pediatric care at Doernbecher Children's Hospital and specialized cancer treatment in the new Vista Pavilion.

Preventive and primary services also grew: family medicine visits rose 9% and general internal medicine visits rose 12% during the fiscal year.

"We are proud of our teams across all missions at OHSU — clinical care, science and education — for accomplishing extraordinary things as they do every year, all while operating more efficiently. It has paid off," Elnahal said. "We broke records on patient volumes, treated the most complex conditions in our history, surpassed previous performance on grants and extramural funding, and took a positive step in a long-term journey to financial health."

He emphasized the recovery came without cuts. "What is equally impressive is how we got there — not by cutting, but rather by investing in our represented workforce, our faculty, and in our people," Elnahal said. "They did the rest."

Costs still growing

Leaders explicitly cautioned that one positive year does not close the structural gap. Costs continue to grow, and the institution faces major capital and operating expenses ahead. Elnahal named a planned NICU expansion among the looming financial challenges, alongside policy risks including changes to Medicaid coverage, student financial aid and federal grant review processes.

"Now is not the time to take our foot off the accelerator," he said.

The education mission posted its own milestone: enrollment at a 10-year high, which OHSU had previously reported in February.

For research administrators benchmarking against peer academic medical centers, the OHSU results offer a data point on how a top-tier NIH-dependent institution navigated a year of federal funding anxiety — posting double-digit growth in both federal and industry awards while restructuring its finances around clinical revenue. Whether the margin and award records hold will become clear with October's audited figures, and with how federal grant review changes land in the next award cycle.