There are some potentially bumpier times for healthcare credit profiles, according to Fitch Ratings.
The sector is “poised for moderate growth across subsectors,” according to the firm’s outlook for U.S. medical devices, care providers, and pharmaceuticals. Steady margins and growth of free cash flow are expected. The forecast for provider revenue growth is 4% to 5% in 2025 based on volume increases, higher reimbursement rates from both Medicare and commercial insurers, and an aging population that will have more need for services.
However, efforts to reduce the size of government agencies and the expansion of tariffs are “neutral to negative for healthcare credit profiles.” The implications vary depending on the type of company.
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