Moody's Investor Services has released a report, "New Forces Driving Rise in Not-for-Profit Hospital Consolidation," citing new forces behind non-profit hospital consolidations.
Historically, hospitals consolidated to deal with challenges in Medicare reimbursement, capital for inpatient facilities and tax-exemption. Now, hospitals need to face those issues in addition to reimbursement challenges from all payors, capital for information technology, rising healthcare costs and slow economic recovery, according to the report.
However, Moody's reports that hospital consolidations are positive because they promise greater operating efficiencies and give the ability to spread risk across larger organizations leading to stronger, more stable bond ratings. Hospitals absent from consolidations may meet greater negative pressures when they need to match the financial, managerial and market access of larger hospital systems.
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Historically, hospitals consolidated to deal with challenges in Medicare reimbursement, capital for inpatient facilities and tax-exemption. Now, hospitals need to face those issues in addition to reimbursement challenges from all payors, capital for information technology, rising healthcare costs and slow economic recovery, according to the report.
However, Moody's reports that hospital consolidations are positive because they promise greater operating efficiencies and give the ability to spread risk across larger organizations leading to stronger, more stable bond ratings. Hospitals absent from consolidations may meet greater negative pressures when they need to match the financial, managerial and market access of larger hospital systems.
More Articles on Hospital Consolidations:
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