Moody’s Investors Service said that its outlook for investor-owned healthcare providers remains negative, as it expects the economic downturn to aggravate the volume and cost pressures that providers already face. The ratings agency expects an increase in uninsured patients and more difficulty collecting patient copayments and deductibles as consumers struggle to meet their obligations. Moody’s changed its outlook from stable to negative in November 2008.
The favorable pricing that the for-profit hospitals have had for the past three years—with median growth in revenue per adjusted admission of 4% or better in the past 12 quarters—has become much more uncertain, Moody’s said. That’s because commercial plans are struggling with their own margins, and state and federal budgets are under strain, according to Moody’s. On the cost side, despite aggressive cost-cutting, rising physician employment and the costs of devices and drugs also will strain margins, Moody’s said.
In general, the 14 investor-owned companies that Moody’s rates generally have solid liquidity for the next 12 to 18 months, the ratings agency said.
