New Fitch Ratings figures show that operating profitability of not-for-profit hospitals and health systems rated by Fitch improved substantially in 2005, exceeding expectations from the previous year’s median ratios report. Fitch’s portfolio includes ratings on 256 hospitals, healthcare systems, or related institutions. Information from 222 of them is included in the new median ratios report. The median operating margin increased to 2.8 percent last year, the highest level since 1997 and the third consecutive year of growth. In the report, titled 2006 Median Ratios for Nonprofit Hospitals and Health Care Systems, Fitch attributes the improved operating margins to solid revenue growth, better control of expenses, and improved efficiencies resulting from investment in information technology and quality initiatives. Also, some hospitals have sold off non-core, unprofitable business lines. Operating improvement was spread across all rating categories, including the lower investment-grade and below-investment-grade grade categories. Liquidity ratios and capital-related ratios also showed improvements in 2005. For information, contact Fitch at (800) 753-4824.
Learn key performance indicators for pay-for-performance and consumer-directed health care at HFMA's audio webcast.
