Not-for-profit hospital outlook upgraded to neutral

Healthcare Finance News December 11, 2024
Jeff Lagasse

The sector has seen improved operating margins while the escalation of labor expenses has slowed, says Fitch.

U.S. nonprofit hospitals have made some meaningful strides over the past few months – enough for Fitch Ratings to revise its outlook from deteriorating to neutral, the rating agency said this week.

While there are still headwinds, the not-for-profit hospital sector has seen improved operating margins following a tough three years of compression. In particular, the escalation of labor expenses has slowed somewhat, along with an ease in inflationary pressures.

Hospitals’ balance sheets have seen improving operating cash flows and strong equity market returns, Fitch said.

WHAT’S THE IMPACT?

The current forecast from Fitch, based on these slowly improving operating margins, is a...

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