The effects of the recession are worsening downward operating trends in revenue and inpatient volumes and increasing capital and operating costs that were already apparent in the not-for-profit healthcare sector prior to 2008, according to a new report from Standard & Poor's Ratings Services. New challenges--including rising pension costs and state budget stress--are likely to compound the problems facing the sector.
Other challenges include scarcer capital, a growing burden of uncompensated care aggravated by the deepening recession, and softer volumes at a time when the costs of many large projects are coming online. As a result, Standard & Poor’s expects rating downgrades to significantly exceed upgrades in 2009.
One hopeful note in the report is the potential for additional federal government funding for Medicaid, which will help relieve the pressure of a growing number of unemployed, uninsured patients.
The report is available at www.standardandpoors.com/ratingsdirect (subscription required).
