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April 25, 2013 12:00 AM

Small hospitals get more bad news from Moody's

Beth Kutscher
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    The bad news keeps getting worse for small hospitals.

    A report from Moody's Investors Service shows that five out of the six not-for-profit hospitals that had their credit ratings downgraded in the first quarter were facilities with under $500 million in revenue.

    The agency also downgraded twice as many providers as it upgraded (six compared with three). Of the systems that were upgraded, two had annual revenue topping $500 million, are considered dominant in their respective markets and are bucking the trend of shrinking patient volume.

    Small hospitals are particularly vulnerable in a challenging operating environment, Moody's said, because they have less leverage with payers and suppliers and fewer areas where they can gain economies of scale, and they rely on a few key physicians who would cause staffing holes if they left.

    Moody's also highlighted struggles with integrating health IT investments as straining resources at two downgraded systems: Wake Forest Baptist Medical Center, Winston-Salem, N.C., and Citrus Memorial Hospital, Inverness, Fla.

    The other four downgraded hospitals were Helen Keller Hospital, Sheffield, Ala.; East Jefferson General Hospital, Metairie, La.; Adena Health System, Chillicothe, Ohio; and Ohio Valley General Hospital, McKees Rocks, Pa.

    The upgraded hospitals were El Camino Hospital District, Mountain View, Calif.; Overlake Hospital Medical Center, Bellevue, Wash.; and the University of Wisconsin Hospital and Clinics, Madison.

    The healthcare industry is coming off a year in which Moody's downgraded a record amount of debt, $20 billion, compared with the $6.4 billion in debt that it upgraded.

    And Moody's says it sees no evidence that the outlook will improve for not-for-profit healthcare providers, with downgrades expected to outpace upgrades even into 2014. In the fourth quarter of last year, Moody's similarly downgraded twice as many providers (10) as it upgraded (five), citing increasing debt loads, declining liquidity and increased competition.

    Follow Beth Kutscher on Twitter: @MHbkutscher

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      • Regional News
        • Midwest
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    • Blogs
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      • HIMSS 2023
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      • From the Editor
    • Events & Awards
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        • Nominate/Eligibility
        • 100 Most Influential People
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        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
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      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
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      • Sponsored Video Series - Checking In with Dan Peres
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