Increasing revenues and improved operating controls directly supported a continuation of solid profitability levels for the not-for-profit hospitals and healthcare systems in Fitch’s portfolio in 2006, as shown in a Fitch Ratings special annual report titled 2007 Median Ratios for Non-Profit Hospitals and Heath Care Systems. Fitch’s not-for-profit healthcare portfolio includes underlying ratings on 262 stand-alone hospitals, healthcare systems, or related institutions, 218 of which are included in this special median ratios report.
Overall, Fitch’s portfolio exhibited sound improvement in most financial indicators in 2006. Except for Fitch’s AA rating category, liquidity ratios remained flat or declined, which Fitch largely attributes to sizable capital spending that took place throughout the calendar year. The median operating margin for 2006 remained at 2.8 percent, the same level as in 2005. Operating margins remained static across all rating categories except the AA category, which increased to 4.1 percent in 2006 from 3.4 percent in 2005. The 2006 results reflect continued implementation of management best practices, a relatively stable revenue environment with favorable rate increases from managed care payers, improved expense control, and operating efficiencies that can be attributed in part to investment in quality and IT. For more information, call 212-908-0526.
