HFMA recently discussed the impact of Massachusetts' health reform legislation on hospitals' creditworthiness with Roger Goodman, assistant vice president, healthcare ratings team and higher education and other not-for-profit ratings team, Public Finance Group, at Moody’s Investors Service. In the course of the conversation, we posed this question: If there were one thing you could tell hospital CFOs to do differently to improve their credit ratings, what would it be? Here is his response:
If there were an easy answer to that question, I think everyone would be rated higher than they are now. Hospitals face a lot of common challenges that you’ve mentioned or I’ve mentioned, for instance, Medicare, the growing uninsured population, and investing in clinical quality. But they also face unique circumstances in their local markets, including physician relationships and dynamics and external competition demographics. The best thing a CFO and the management team of a hospital can do is plan strategically, implement those plans and operate soundly over time, and continue to pursue their specific strategy for, not only pursuing and enhancing their mission, but also improving their competitiveness.
Over a long-term horizon, we wouldn’t encourage any really short-term focus on getting a certain number to a certain point in the next year. We often look for a well-articulated plan, again over the long term, as one of the key drivers of credit quality and rating.
You can read the entire interview in the forthcoming August issue of hfm magazine.
