Not-for-profit hospitals and health systems will find it increasingly difficult to cut expenses and hold onto stable profits after 2013, a group of financial analysts concludes.
Fitch Ratings analysts' outlook for 2013 highlights the continued pressure on hospital operations from a weak economy and scheduled cuts to hospital pay under healthcare reform. Hospitals and health systems moved during the recession to slash expenses and have continued to do so—some quite notably— through the halting recovery.
Those cuts will soon be unable to deliver stable profits, Fitch analysts said. "Fitch believes 2013 is likely to be the last year of stable performance, as scarcer expense-reduction opportunities and looming reimbursement reductions threaten operating performance," the analysts said in their report.