Children's hospitals in general financially outperform general acute-care hospitals and as a result have a brighter ratings outlook, according to a Moody's Investors Service sampling of 25 children's and 344 general acute-care hospitals. Children's hospitals had median cash and investments of $169 million in 2003, compared with a $100 million median at general hospitals. In addition, children's hospitals earned a median 2.7% operating margin and median 4.5% return on assets in 2003, compared with 1.4% and 3.5%, respectively, at general hospitals. Among hospitals rated by Moody's, children's hospitals had a median A1 rating, while the median rating for general hospitals was A3. Children's hospitals offer a high-demand service and given a relative lack of competition can negotiate better deals with managed-care payers, said Lisa Goldstein, senior vice president at Moody's. Balance sheets at children's hospitals also get a fund-raising boost because the public has a "more sympathetic ear" for their mission, Goldstein said. -- by Paul Barr
Better finances, ratings at children's hospitals
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