Two major credit-rating agencies have released reports showing that operating margins have improved for not-for-profit hospitals and health systems.
For the first time since 2011, revenue growth surpassed expense growth, according to the report from Moody’s Investors Service. Median revenue growth for healthcare providers rated by Moody’s was 5.2% in 2014, while expenses grew at a slower 4.6%. The report from Standard & Poor’s found that operating margins increased to 2.7% in 2014 compared with the prior year’s 2.1%. Margins were higher for health systems, at 2.9%, than stand-alone hospitals, at 2.4%. S&P analysts said they expect the trend to continue through 2015.