One major ratings agency is publishing how much cash on the books of U.S. hospitals is temporarily off limits.
Cash has always been critically important to analysts trying to decide which hospitals are solid investments and which are risky bets. Hospitals burn cash for paychecks, utility bills, supplies and debt payment. Lots and lots of debt.
The recession and credit crisis erased huge sums of cash from hospital balance sheets, though much of that loss has been restored by a combination of market gains and hospital efforts to slash capital spending and cut operational expenses, including layoffs.
Still, fresh memories of the jarring plunge to hospitals' cash have prompted Moody's Investors Service to pry for more information on how hospital cash is invested and how quickly assets—like stocks, real estate or hedge funds—can be liquidated, if necessary. (That doesn't count gifts from donors who put restrictions on cash.)
As Moody's notes in its reports, some are less-liquid than others.
Yale New Haven (Conn.) Hospital had $528 million in cash and investments when it closed its books last year. But the prestigious teaching hospital needs more than a year to get its hands on about $79 million tied up in longer-term investments.
Meanwhile, Catholic Health East in Newtown Square, Pa., has roughly $1.07 billion of its $1.5 billion cash cushion available within one month's time, one bright spot in Moody's negative outlook for the system earlier this month.
At the nation's largest Catholic health system, Ascension Health, officials need one month or less to cash out $5.1 billion of the $6.4 billion in cash on the books at of the end of December. But the giant system plans to revert to its long-term investment strategy, which analysts say could tie up more cash.
