Health system balance sheets cushion depleting cash reserves

Strong balance sheet metrics continue to offset weak operating performances for many health systems, but the remaining cushion has become more limited, according to a July 20 report from Fitch Ratings. 

According to Fitch, key balance sheet metrics remain strong for many health systems, despite equity market volatility last year and a decrease of 40 days' cash hand per the company's preliminary median runs. 

Balance sheet strength has provided a substantial rating cushion from higher labor and supply expenses, according to Fitch. 

However, this buffer is growing more limited as weaker cash flow has forced many systems to dip into their reserves.

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