Nonprofit hospital recovery may have peaked, Fitch warns

Healthcare Dive – Wednesday, August 12, 2026
By Sy Mukherjee

Dive Brief:

• Nonprofit hospitals and health systems rated by credit ratings agency Fitch raised their operating margins and extended their financial recovery last year, according to a Fitch Ratings report based on audited fiscal 2025 data.
• The median operating margin among 222 nonprofit providers rose to 1.5%, compared to 1.1% in 2024, according to the report, and gains were increasingly concentrated among more financially stable providers.
• Still, Fitch warned that 2025 could prove to be an “operational peak” before Medicaid funding reductions and other policy changes begin to pressure hospital revenue more significantly in 2027. Financially unstable and Medicaid-dependent providers have less financial cushion to absorb the coming strain, according to the credit ratings agency.

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