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July 31, 2012 2:37:15 pm

Moody’s Continues Negative Outlook For Nonprofit Hospitals

According to a new credit outlook by Moody’s Investor Service, the amount of downgraded nonprofit hospital debt has exceeded the amount of upgraded hospital debt.  In the second quarter of 2012, the downgraded hospital debt was $2.78 billion, compared to upgraded hospital debt at $2.11 billion.  

The higher amount of downgraded debt represents a shift for the industry, which has experienced higher total upgraded debt than downgraded in eight of the past thirteen quarters.  

Additionally, Moody’s downgraded 12 nonprofit hospitals and upgraded nine.  The downgrades were the result of flat revenues, weak volumes, a growing federal deficit, and a reliance on supplemental revenue., according to Moody’s.  The upgrades resulted from strong management, increased revenues from state provider taxes, and mergers.  

The rating agency is continuing the negative outlook for the industry. 

For more on Moody’s credit outlook, please see the Healthcare Financial Management Association.  To learn more about REDW’s healthcare services, please contact Steve Cogan or Chris Tyhurst.
 


Tags: nonprofit, healthcare


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