High unemployment rates are expected to strain U.S. for-profit hospitals and drugmakers in the coming year, according to analysts with Fitch Ratings. The outlook for both sectors remains negative. “Fitch believes that persistent high unemployment in 2010 will continue to impact health insurance coverage and people’s ability to mange out-of-pocket costs of care, which will mute growth prospects for the industry,” said Fitch analyst Michael Weaver.
Unemployment seen weighing on for-profits, drugmakers
Among for-profit hospitals, unpaid medical bills, or bad debt, are expected to climb in 2010 compared with the prior year, said Lauren Coste, a Fitch analyst.
Expenses such as labor and supplies, which for-profit hospitals successfully curbed this year, are also expected to climb, she said. Demand for prescription drugs will likely be curbed by job cuts that squeezed household spending. Drugmakers also face drug patient lapses and provisions in healthcare overhaul legislation that could affect reimbursement and patent protection, according to Fitch. The New York credit-rating agency said the outlook for medical-device makers was stable.
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