Healthcare CFOs and other top finance leaders view operating margin as one of the most important metrics to gauge the sustainability of their organizations.
In 2012, the median operating margin at most nonprofit hospitals and health systems varied, depending on credit rating and other factors, but generally it fell between 1 and 4 percent.
Here are 33 statistics on nonprofit hospital and health system operating margins, separated by credit rating categories from the three major rating agencies. Note: All data are medians and reflect audited 2012 financial statements.
Fitch Ratings
|
Hospital credit rating |
Median operating margin (2012) |
|
AA |
6.5 percent |
|
AA- |
4.1 percent |
|
A+ |
4.5 percent |
|
A |
3.2 percent |
|
A- |
2.6 percent |
|
BBB+ |
1.8 percent |
|
BBB |
0.9 percent |
|
BBB- |
2.8 percent |
Moody's Investors Service
|
Hospital credit rating |
Median operating margin (2012) |
|
Aa2 |
3.9 percent |
|
Aa3 |
3.5 percent |
|
A1 |
3.6 percent |
|
A2 |
3.2 percent |
|
A3 |
1.9 percent |
|
Baa1 |
1.2 percent |
|
Baa2 |
1.2 percent |
|
Baa3 |
1.2 percent |
|
Below Baa |
-1.8 percent |
Standard & Poor's Ratings Services (health systems)
|
Hospital credit rating |
Median operating margin (2012) |
|
AA+/AA |
3.9 percent |
|
AA- |
4.3 percent |
|
A+ |
2.4 percent |
|
A |
2.5 percent |
|
A- |
1.5 percent |
|
BBB+ |
1.8 percent |
|
BBB/BBB- |
1.2 percent |
Standard & Poor's Ratings Services (standalone hospitals)
|
Hospital credit rating |
Median operating margin (2012) |
|
AA |
5.2 percent |
|
AA- |
4.4 percent |
|
A+ |
5 percent |
|
A |
2.9 percent |
|
A- |
2.6 percent |
|
BBB+ |
2.5 percent |
|
BBB |
1.3 percent |
|
BBB- |
0.6 percent |
|
Speculative grade |
0.4 percent |
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