Analysis: Hospital credit rating activity ‘moderates’ in 2025

Healthcare consulting firm Kaufman Hall reports that hospital credit rating downgrades declined in 2025 while the number of upgrades increased, representing a tempering of downgrade activity in recent years. It says growing volumes, increased supplemental funding and improved labor and expense management “contributed to improved financial performance for many borrowers.”

The report, authored by Kaufman Hall Managing Director Lisa Goldstein, adds, “The overwhelming majority of ratings were affirmed, providing support for the rating agencies’ stable (Moody’s and S&P) and neutral (Fitch) outlooks for 2026.”

Here are Kaufman Hall’s five key takeaways from its analysis:

• The ratio of downgrades-to-upgrades narrowed in 2025.
• The absolute number of downgrades and upgrades were nearly even in 2025, “which underscored the sector’s credit stability.”
• Rating upgrades occurred across the country.
• Merger activity drove some upgrades.
• Rating downgrades mainly reflected weaker financial performance, lower debt service coverage and declining liquidity “with some concentration in New York, Pennsylvania, Ohio and California.”

Get much more information on this topic from Kaufman Hall’s analysis here.