The report noted that not-for-profit hospitals did experience some improvement in revenue growth in fiscal 2011–5.3% compared with 4.5% the previous year–but the sector has historically seen revenue growth topping 7%.
The sector has been impacted by flat inpatient admissions and cuts to state Medicaid programs, even as government health plans comprise a growing share of the payer mix. Medicare and Medicaid now represent 43.7% and 12.8%, respectively, of gross patient revenues, compared with 42.5% and 12.2% in fiscal 2010.
Yet the report added the not-for-profit hospitals have benefited from a stable operating performance and cost-cutting measures, as well as the relatively strong capital markets. They have also delayed capital spending.
Still, as both the federal government and the states look to healthcare expenditures to balance budgets, Moody's predicted more reimbursement cuts and continued pressure on not-for-profits.