Despite continued negative pressures on the not-for-profit healthcare sector, Standard & Poor’s predicts a continuation of 2006’s solid performance for 2007 and into 2008 for the organizations that it rates. The report, U.S. Not-for-Profit Health Care Rating Trends Should Remain Stable Despite Growing Pressures, says that although President Bush is calling for deep cuts to in federal healthcare spending, Medicare and Medicaid reimbursement will likely remain stable until 2009, and healthcare reform initiated by various states is still in the planning stages and thus won’t significantly affect providers yet. Also expected for 2007 are strong “income and cash flow measures, growth in liquidity, and overall improvement in balance sheet measures across most rating categories.” Rapid capital spending will continue over the next two years, although Standard & Poor’s expresses worry that “increased debt levels, coupled with interest costs and depreciation expense that arise when projects are completed, could place further stress on organizations in the coming years when the revenue environment is expected to be less favorable.”
