Last September, S&P revised its outlook on the nonprofit healthcare sector to stable from negative. At that time, the credit rating agency said it expected nonprofit providers’ operational strength to drive the sector until at least the end of 2016.
Nonprofit providers face several challenges, including revenue pressures and volatility of nonoperating investment income, but S&P believes improvements in provider performance will offset industry pressure and create a stable credit environment into 2017.
“Although there are exceptions, we generally believe that credit strength has returned, most specifically at larger health system providers that are leveraging their size and scale and strategic capacity and also for many independent providers with strong enterprise profiles,” said S&P.
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