A skittish patient population, a workforce shortage and ongoing pandemic contributed to "staggering" first quarter 2022 losses for many nonprofit hospitals, Kaufman Hall Senior Vice President Lisa Goldstein said in a June 8 opinion piece on the company's website.
"Clearly we are heading into a period of credit stress," she wrote. "In fact, on its recent spring webinar, Fitch Ratings said as much with a somber warning of downgrades ahead, given the labor challenges and first quarter results."
Credit rating upgrades may be hard to attain in the years ahead as the industry works through labor shortages, but Ms. Goldstein said the vast majority of ratings are affirmed every year. She said hospitals should embrace affirmation as "the new upgrade."
"An affirmation signals to the investor that financial performance is within a band of tolerance, even during times of turbulence," she said. "It subtly says keep doing what you are doing, it’s working, at least from a credit perspective."
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