Not-for-profit hospital downgrades outpaced upgrades 15-to-6 in the third quarter, a slight improvement from the second quarter's 22 downgrades and four upgrades, said Moody's Investors Service, which confirmed its negative industry outlook. All six Moody's upgrades and seven of its 15 downgrades involved noninvestment grade credits. Common problems were declining liquidity, pension funding issues, malpractice costs and management turnover, as well as continuing declines in patient volumes. Moody's said the results suggest "that the stronger credits are just maintaining but not improving their financial positions." In positive news, Catholic Healthcare West, San Francisco, was upgraded by Moody's to Baa1 from Baa2, affecting about $2.2 billion of outstanding debt, after the 41-hospital system posted its first positive operating margin in seven years. Standard & Poor's maintained its BBB rating on CHW but changed its outlook on the system to positive from stable. -- by Mary Chris Jaklevic
Hospital credit outlook still negative: Moody's
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