As the healthcare industry continues to consolidate, the gap between investment-grade and non-investment-grade hospital credit profiles "will likely continue to widen," according to an August report from Fitch Ratings.
Last month, Fitch analysts released its median ratio report. The analysis covered all financial data from 2012 for the 249 hospitals and health systems Fitch rates.
Not surprisingly, the highest-rated organizations posted the healthiest operating and EBITDA margins. Non-investment-grade hospitals had an average operating margin of negative 1.3 percent, which actually was an improvement from 2011. However, Fitch analysts said the slight improvement was due to new accounting rules rather than improved volumes.
Fitch said standalone hospitals with a small revenue base and few beds will continue to struggle with operating costs, payer contracting leverage and weak market characteristics, especially as other standalone competitors are scooped up by larger systems.
Here are 20 statistics on hospital financial margins, broken down by credit rating group, according to Fitch's report.
Median (249 hospitals)
Operating margin: 3 percent
Operating EBITDA margin: 10.3 percent
Excess margin: 4.6 percent
EBITDA margin: 11.6 percent
"AA" rating (60 hospitals)
Operating margin: 4.2 percent
Operating EBITDA margin: 11.8 percent
Excess margin: 6.6 percent
EBITDA margin: 13.6 percent
"A" rating (110 hospitals)
Operating margin: 3.3 percent
Operating EBITDA margin: 10.7 percent
Excess margin: 4.7 percent
EBITDA margin: 11.8 percent
"BBB" rating (64 hospitals)
Operating margin: 1.8 percent
Operating EBITDA margin: 9 percent
Excess margin: 3.2 percent
EBITDA margin: 10.4 percent
Below "BBB" rating, or non-investment grade (15 hospitals)
Operating margin: -1.3 percent
Operating EBITDA margin: 6 percent
Excess margin: 0 percent
EBITDA margin: 7.4 percent
More Articles on Hospital Financial Metrics:
Moody's: 132 Statistics on Nonprofit Hospital Medians
S&P: 34 Statistics on Nonprofit Standalone Hospital Medians
Fitch: Nonprofit Hospital Liquidity Metrics Improved in 2012