Fitch Ratings’ “Quarterly Diagnosis” report for fourth-quarter 2008 reports that the for-profit hospital industry remained relatively stable. Although volumes for Fitch's rated hospitals remained weak, they were offset by strong pricing. Bad debt expense and uncompensated care also remained relatively stable, although Fitch believes that this trend will not last into 2009.
The report also reviews the potential impact of President Obama’s proposed budget and the recently enacted American Recovery and Reinvestment Act (ARRA) on for-profit hospitals. Fitch believes that ARRA’s economic stimulus funds are a strong positive for the hospital industry, particularly the increase in federal matching rate (FMAP) funding for state Medicaid programs.
With respect to President Obama’s proposed budget, Fitch believes that the proposal would be positive for the industry if universal or near-universal healthcare coverage is established. It foresees difficulties, however, in enacting the budget as currently written.
Read the report (registration required).
