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According to a new report from Fitch Ratings, the nation's not-for-profit hospitals and health systems in 2005 "exceeded expectations and showed significant [financial] improvement," with profitability ratios reaching their highest level since 1998. Fitch released the data as part of its 2006 Median Ratios for Nonprofit Hospitals and Health Care Systems report and said the rising profitability was largely a result of higher revenues and stricter operating cost controls.
According to a new report from Fitch Ratings, the nation’s not-for-profit hospitals and health systems in 2005 “exceeded expectations and showed significant [financial] improvement,” with profitability ratios reaching their highest level since 1998. Fitch released the data as part of its forthcoming 2006 Median Ratios for Nonprofit Hospitals and Health Care Systems report and said the rising profitability was largely a result of higher revenues and stricter operating cost controls. Operating margins rose from 2.1% in 2004 to 2.8% in 2005, while excess margins also increased significantly for the third consecutive year, reaching 4.8% in 2005, up from 3.7% in 2004. The higher operating margins also helped to improve liquidity, with the median for days cash on hand rising to 163.9 days in 2005 from 157.8 days in 2004 (Fitch Ratings release, 7/12). |
