Moody's Investors Service has issued a negative outlook for non-profit healthcare services over the next 12-18 months, with hospitals experiencing falling revenues as federal stimulus funding ends in June and payment transitions away from fee-for-service models, according to a Healthcare Financial Management Association report.
Moody's said it expects more negative credit factors than positive factors for hospitals for the next several years, according to the report.
Hospitals can expect lower patient volumes and more bad debt due to a still struggling economy. Hospitals will also have to deal with risks such as "bank facility renewal risk, pension obligations, increased exposure to non-cancelable operating leases, the negative valuation of swap portfolios and increased capital spending funded with cash reserves," according to the report.
Moody's does, however, expect some positive factors to impact hospitals, including stable operating performance, improved investment performance, increased mergers and acquisitions and provider fees to ease Medicaid reimbursement cuts, according to the report.
Read the HFMA report on non-profit hospitals.
Read more coverage on Moody's:
- Moody's: Despite Financial Improvements in 2009, Outlook for Non-Profit Hospitals Remains Negative
- Moody's Says FY 2011 Medicare Cuts Will Hurt Non-Profit Hospitals
Moody's said it expects more negative credit factors than positive factors for hospitals for the next several years, according to the report.
Hospitals can expect lower patient volumes and more bad debt due to a still struggling economy. Hospitals will also have to deal with risks such as "bank facility renewal risk, pension obligations, increased exposure to non-cancelable operating leases, the negative valuation of swap portfolios and increased capital spending funded with cash reserves," according to the report.
Moody's does, however, expect some positive factors to impact hospitals, including stable operating performance, improved investment performance, increased mergers and acquisitions and provider fees to ease Medicaid reimbursement cuts, according to the report.
Read the HFMA report on non-profit hospitals.
Read more coverage on Moody's:
- Moody's: Despite Financial Improvements in 2009, Outlook for Non-Profit Hospitals Remains Negative
- Moody's Says FY 2011 Medicare Cuts Will Hurt Non-Profit Hospitals