OREANDA-NEWS. Median operating profitability for U.S. nonprofit hospitals showed strong gains over the past year, though growth in operating cash flows show the credit gap widening between higher- and lower-rated borrowers, according to Fitch Ratings in a new report.

Strong cash flows and investment returns coupled with lower capital spending and diligent revenue cycle management helped precipitate the improvement in key median liquidity metrics. 'Further revenue cycle challenges lie ahead, though most investment-grade nonprofit hospitals have planned adequately and have sufficient financial cushion to endure potential revenue cycle disruptions,' said Director Jennifer Kim.

Fitch assigned a Negative Rating Outlook for the nonprofit hospital sector in December 2014. However, growing clarity on the fate of the Patient Protection and Affordable Care Act (PPACA) has since provided more stable expectations as hospital issuers execute strategic plans. Fitch believes the positive momentum will continue for the remainder of this year before tapering in 2016-2017 as reimbursement pressures and supplemental funding cuts begin to accelerate.

'2015 Median Ratios for Nonprofit Hospitals and Healthcare Systems' is available at 'www.fitchratings.com' or by clicking on the above link.

Additionally, Fitch has released the 2015 Nonprofit Hospital and Healthcare Systems Interactive Peer Study, an interactive Excel-based analytical tool for comparing a hospital's and/or healthcare system's key financial metrics to median calculations on a notch-specific rating basis for comparable entities rated within the same rating category (i.e. 'AA', 'A', 'BBB' and against Fitch's portfolio of credits included in the median report.) The Peer Study is available on Fitch's website, at 'www.fitchratings.com'.