The continued revenue growth supports Moody’s stable outlook on the sector. The outlook is also supported by the median three-year revenue compounded annual growth rate of 5.6 percent. The revenue CAGR exceeded the three-year expense CAGR for the first time since 2011, according to Moody’s.
With a median operating margin of 3.4 percent and a median operating cash flow margin of 10.3 percent, preliminary profitability margins in the nonprofit healthcare sector are at a multi-year high. However, Moody’s expects those margins to soften when the full-year medians are released later this year.
The preliminary medians are based on an analysis of audited FY 2015 financial statement for 190 nonprofit healthcare organizations, including freestanding hospitals as well as single- and multi-state health systems.
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