NEW YORK, June 13 (Fitch) Standalone children's hospitals continue to exceed the
financial metrics of the general U.S. not-for-profit (NFP) acute care hospitals,
according to a recent report by Fitch Ratings, and their financial strength has
positioned them well for healthcare reform. They have grown total revenue year
over year with solid operating margins, despite the high percentage of exposure
to Medicaid reimbursement.
The standalone children's hospitals used in the report demonstrate strong
liquidity, improved operating profitability, and robust capital spending with
moderating debt burden. In 2012, the median standalone children's hospital had
248.7 days cash on hand and 12.8% operating EBITDA compared with general NFP
acute care hospitals which recorded 181.7 days cash on hand and 9.4% operating
In 2012, standalone children's hospitals reduced their capital spending since
many have made significant investments over the last several years in major
expansion projects or replacement facilities. Standalone children's hospitals
have an advantage over other general acute care providers given their market
position in highly specialized services. As the coordination of care grows
across the various sectors of healthcare, we expect them to remain key partners.
Some have also begun to enter risk-based contracts for a portion of its Medicaid
population by accepting capitated payments.
More details can be found in the report "2013 Median Ratios for Not-for-Profit
Children's Hospitals" dated May 7, 2013 and available on Fitch's website: