Higher reimbursement amid sustained demand for services will improve the credit quality of hospitals, nursing homes and other providers, Standard & Poor's said. Medicare and Medicaid rate increases averaging in the low single digits and private payer rate increases in the low double digits should keep revenue in pace with growing labor costs, the ratings agency said. However, an increase in the uninsured population could dampen demand for nonurgent care. In a separate report, S&P said the range of credit quality among not-for-profit hospitals continued to widen in 2003 with new uncertainties over how consumer participation in benefit design, quality measures and growth in the uninsured will affect hospital income. With interest rates still low and pent-up capital needs, not-for-profit hospitals increased sales of new debt by 8.2% to nearly $27.7 billion in 2003 from $25.6 billion in 2002, according to new data from Thomson Financial Securities Data. The number of new issues increased by two, from 639 to 641. -- by Mary Chris Jaklevic
S&P: Better financial outlook for not-for-profits
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