Cost-cutting pressures are jeopardizing credit ratings of US healthcare companies, analysts say

As drug pricing and national health insurance remain part of the political conversation, agencies are warning that the increased public pressure to cut medical costs has threatened the credit ratings of U.S. healthcare companies, according to The Wall Street Journal.

The warning comes from S&P Global Ratings, Moody’s Corp. and Fitch Ratings as the ratings agencies increase the inclusion of environmental, social and governance factors with credit scores, the newspaper reported.

Andrew Steel, global head of sustainable finance at Fitch, told the Journal healthcare companies "are facing secular trends that are becoming headwinds to organic growth and profitability."

Tulip Lim, director of U.S. healthcare at S&P, and Simone Andrews, environmental, social and governance analyst at Moody’s, also weighed in.

Ms. Lim told the Journal cost-cutting efforts will add to financial risks from healthcare reimbursements, and Ms. Andrews said the pressure hospitals feel are due to aging populations.

Read the Journal's full report here

 

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