Moody's Investors Service calls the proposed merger between Catholic healthcare giants Trinity Health and Catholic Health East credit positive for the not-for-profit hospital industry.
The proposal, announced last week, would create the second-largest not-for-profit healthcare system by net-patient income in the U.S., trailing only St. Louis-based Ascension Health. Officials hope to finalize the merger by spring.
In the company's weekly credit outlook (PDF), Moody's said the merger is typical of the industry. The firm expects to see more hospitals merge in the future: “We view consolidation as a credit positive for the industry overall as merger, acquisitions and various partnership models should create greater efficiencies and lead to reduced hospital operating costs over the long term. Consolidation is one of the positive mitigants to our negative sector outlook for the not-for-profit hospital industry,” the report read.