Fitch Ratings said its outlook on the not-for-profit hospital and healthcare industry is stable for 2007, with expectations that there will be slight improvement in the operating performance of the roughly 265 hospitals it rates, similar to 2006. The ratio of downgrades to upgrades also is expected to improve. Revenue growth should offset usual risks such as inconsistent volume trends and rising expenses, Fitch said. Opportunities for hospitals include physician alignment strategies. In addition, quality and patient-safety initiatives will more than likely pay dividends over the medium to long term as consumerism gains momentum, Fitch said. Increased scrutiny of hospitals by federal, state and local officials such as the Internal Revenue Service make it paramount for not-for-profit hospitals to increase transparency and disclosure surrounding community benefit, Fitch said. Although volume trends likely will remain volatile over the short term, the aging baby boom population should contribute to volume growth in most markets over the long term, according to Fitch. The firm also said it expects the financial gap between credits to widen at both ends of the rating scale because of rising capital needs and necessary investments in information technology. -- by Cinda Becker
Fitch says outlook for 2007 is stable
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