Fitch revises nonprofit hospital outlook to stable for 2021, says downgrades will outpace upgrades

Fitch Ratings has changed the outlook for U.S. nonprofit hospitals from negative to stable for 2021. The credit rating agency also said that rating downgrades will likely outpace upgrades for the industry next year. 

Fitch said it believes acute care hospitals will remain pressured by the challenges resulting from the COVID-19 pandemic, but "not to a greater extent than in 2020."

Although the clinical mix may look different for hospitals, with more COVID-19 cases than specialty ones, Fitch expects total revenue in 2021 to be higher than in 2020. This is because providers saw steep declines in patient volume and revenues amid government-mandated stay-at-home orders and elective procedure halts this spring.

Despite some positives for the industry, Fitch said that hospitals will continue to face stress and strain until a viable vaccine is widely available and utilized. 

Hospitals will also face an increase in operating expenses in 2021 as they work to secure personal protective gear and ensure adequate staffing, Fitch said.

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