Becker's Healthcare March 28, 2025
Nonprofit hospitals showed notable financial improvement in early fiscal year 2024, but strong liquidity will be “crucial” to navigate ongoing labor cost pressures, potential Medicaid reimbursement cuts and broader economic uncertainty, Fitch Ratings said in a March 26 report.
Hospitals with fiscal year ends in the first half of 2024 reported a median operating margin of 1.2%, rebounding from -0.5% in 2023. The improvement was largely driven by a decline in staffing costs — particularly contract labor — as hospitals stabilized their workforces and reduced reliance on expensive temporary staff. Labor costs as a share of total operating revenue fell from 55.4% to 54.5% year over year.
Despite the modest cooling in labor costs, operating expenses still rose 6.9% year...
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