Bonds of eight hospitals lapsed in impairment in the first quarter of 2023, the highest number of hospitals disclosing default since 2011, Bloomberg reported March 31.
Only one hospital disclosed default in the first quarter of 2022, according to the report.
The data comes from Municipal Market Analytics. Lisa Washburn, the organization's managing director, told Bloomberg that an unusual aspect of the impairments is some are coming from large, highly-rated systems.
Ms. Washburn said that is due to a combination of negative investment returns in 2022, federal COVID-19 relief funds drying up and rising costs, particularly labor, according to the report. She added that a backlog of patients who need to move to nursing homes but cannot due to staffing shortages also have affected finances.
"And now add to it that debt costs are higher," she told Bloomberg.
Another source of pressure is competition for patients, Chris George, a senior managing director at FTI Consulting, told the publication.
"You're seeing a very slow evolution of care moving to an ambulatory setting," he said.
Mr. George added that the biggest challenge for many local hospitals is access to capital.
Read the full report here.