Fitch Sees Hospitals Struggling to Grow With Operating Margins Lower
- Sector is improving, but more slowly than anticipated
- Expect downgrades to continue outpacing upgrades, firm says
Hospitals typically need at least 3% to be able to meet their obligations, invest and save.
Photographer: Daniel Acker/BloombergNot-for-profit hospitals must adjust to financial results falling short of what’s traditionally needed to grow and invest, according to Fitch Ratings.
Operating margins now in the 1%-2% range form a “pain point” as the sector navigates higher costs and the need for investment, Fitch Ratings senior directors Kevin Holloran and Mark Pascaris wrote in a report Monday. Hospitals typically need at least 3% to be able to meet their obligations, invest and save, they said.