Even healthcare's financially elite are showing signs of slippage.
Moody's Investors Service showed no mercy for top-rated hospital systems whose enviable credit positions were rocked by broader financial pressures last year. The New York-based rating agency downgraded or revised outlooks on 17 Aa-rated credits in 1998, according to a newly published outlook of the not-for-profit hospitals sector.
"This is because the higher-rated health systems tend to be larger, developing health systems with teaching programs, making them susceptible to merger and integration-related risks and (Balanced Budget Act) payment reductions," the report notes.
Moody's latest analysis reiterates predictions of a period of extreme volatility and further downgrades in the near term. Now, however, the agency insists that the financial and operating pressures affecting the industry are also being felt at the very top of the ratings spectrum.
Healthcare analysts used to say, "The strong are getting stronger and the weak are getting weaker," but the latest industry trends are beginning to test that premise, the agency notes.