KaufmanHall January 9, 2025
At the surface, 2024 appeared to be a year of industry stabilization. Operating margins showed sustained improvement, and all three rating agencies issued stable or neutral outlooks for not-for-profit hospitals and health systems in 2025 (Moody’s Ratings adjusted its outlook from negative to stable at the end of 2023, and Fitch and S&P Global Ratings made similar adjustments at the end of 2024).
It was not necessary to dig too deeply, however, to find signs of ongoing distress below the surface. The title of S&P’s 2025 outlook noted that the industry was “stable but shaky for many amid uneven recovery.”[1] Moody’s reported that although the industry outlook is stable, with a median operating cash flow margin approaching 7%, “the pace...
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