Credit downgrades nearly doubled while upgrades declined in the first six months of 2008 compared with the period a year ago among the not-for-profit hospital and health systems rated by Standard & Poors. The New York-based rating agency downgraded 31 not-for-profits between January and June, and upgraded 11. In 2007, S&P analysts downgraded 17 not-for-profit hospitals or health systems and upgraded 13.
Large capital investments, slipping margins and the U.S. credit crisis increased the strain on hospital and health system operations in the first half of the year, particularly for already weak hospitals. Expensive information technology, quality and pay-for-performance initiatives are straining stand-alone hospitals. Health systems benefited from size, diversification and leverage. There is a broad range of incremental forces, all of which are impacting margins, said Martin Arrick, a managing director at S&P. -- by Melanie Evans
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