Hospitals, physician practices and other healthcare organizations are expected to lose between $10 billion and $11 billion this year due to the 2 percent Medicare cuts from sequestration, and over the next decade, the cuts will further impair non-profit hospitals' "already challenging operating environment," according to a new report from Moody's Investors Service.
Sequestration went into effect April 1. The expected amounts of lost Medicare revenue have ranged from a couple hundred thousand at critical access hospitals to tens of millions at larger health systems and academic medical centers.
Moody's analysts said in the report that sequestration will further squeeze the finances of hospitals that disproportionately rely on Medicare for income. Moody's already had a negative outlook on the non-profit hospital sector, and those organizations will have to work harder to keep revenue steady in a time of increasing domestic austerity.
"Many not-for-profit hospitals are already facing low revenue growth from both governmental and private insurance payors, and new Medicare cuts will exacerbate these problems," said Sarah Vennekotter, Moody's assistant vice president and author of the recent report, in a news release.
Sequestration went into effect April 1. The expected amounts of lost Medicare revenue have ranged from a couple hundred thousand at critical access hospitals to tens of millions at larger health systems and academic medical centers.
Moody's analysts said in the report that sequestration will further squeeze the finances of hospitals that disproportionately rely on Medicare for income. Moody's already had a negative outlook on the non-profit hospital sector, and those organizations will have to work harder to keep revenue steady in a time of increasing domestic austerity.
"Many not-for-profit hospitals are already facing low revenue growth from both governmental and private insurance payors, and new Medicare cuts will exacerbate these problems," said Sarah Vennekotter, Moody's assistant vice president and author of the recent report, in a news release.
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