A recent Standard & Poor’s report reveals that upgrades exceeded downgrades in 2015 for U.S not-for-profit stand-alone hospitals and health systems. 

Specifically, 24 percent of the total 506 rating reviews performed in 2015 changed, with 76 reviews resulting in upgrades, compared with 46 downgrades. According to S&P, this is the first time that upgrades exceeded downgrades since 2012.

The increase in upgrades is largely due to the revised rating methodology for not-for-profit acute care stand-alone hospitals, according to the ratings agency. These revisions, implemented in December 2014, were intended to bring additional transparency to the rating process.

In prior years, the average percentage of rating changes – either upgrades or downgrades – fluctuated between 13 percent and 17 percent. According to S&P analysts, “When we exclude changes in 2015 due solely to revised criteria, the percent of ratings changes drops to 14 percent, which is consistent with historical levels.”

The credit agency’s 2016 outlook for the U.S. not-for-profit healthcare sector is stable. Analysts predict the acute care sector will continue to benefit from Medicaid expansion, as hospitals experienced lower uncompensated care and stronger revenue. The agency also anticipates mergers and acquisitions to continue.