Moody’s: Negative Outlook Continues for Not-for-Profit Hospitals
Jan. 22 — The U.S. not-for-profit hospital outlook remains negative in 2013, Moody’s Investors Service said in a release today. Although revenue growth will remain positive, Moody’s expects the rate of growth to decrease.
Moody’s outlook for this sector has been negative since 2008 because of continued reductions in patient volumes, changes in how hospitals are paid, and government and business pressures to lower healthcare service costs, according to the Moody’s report, U.S. Not-for-Profit Healthcare Outlook Remains Negative for 2013.
Negative pressures on rate growth include federal cuts to medical spending and limited payment increases from insurers, the rating service said. For example, the industry is facing more than $300 billion in Medicare payment reductions through 2019. The transition to new payment models—including potential overinvestment in vertical integration and management of different methodologies simultaneously—also will introduce risks.
Positive trends for revenue growth include an increase in mergers and affiliations, which has stabilized operating results, as well as patient volumes increasing because of an aging population and insurance expansion, Moody’s said.
Publication Date: Tuesday, January 22, 2013