Moodys Investors Service downgraded 40 and upgraded 30 not-for-profit hospitals in 2006, a ratio of 1.3-to-1 and a return to the historical trends of downgrades outpacing upgrades. In 2005 upgrades outpaced downgrades 1.1-to-1. However, in total Moodys upgraded $17.2 billion in debt and downgraded $5.8 billion. That was due to the inherent strengths enjoyed by the larger health systems that were upgraded, Moodys said. The downgrade-to-upgrade ratio for 2006 was still better than 2004 and 2003, when the ratios were 1.5-to-1 and 1.9-to-1, respectively. Downgrades in 2006 were driven by material increases in debt, increases in charity care and self-pay volumes, growing competition and costs associated with construction projects, Moodys said. The agency rates 535 hospitals and not-for-profit health systems representing $120 billion of debt. The median rating is A3. -- by Cinda Becker
Downgrades outpace upgrades
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