Although the nation's major for-profit hospital operators posted lower admissions in the second quarter of 2012, revenue grew at an average of 3.7 percent thanks to high liquidity and a boom in acquisitions, according to a report from Fitch Ratings.
In the second quarter, same-hospital admissions among several for-profit hospital companies — including Nashville, Tenn.-based Hospital Corporation of America and Franklin, Tenn.-based Community Health Systems — dropped 2.7 percent on average. Adjusted admissions were almost flat at 0.5 percent. Fitch attributed the slow volume numbers to persistently high unemployment rates.
However, the growth in revenue signaled a positive for the industry, although payment challenges such as Medicare cuts through sequestration and the Patient Protection and Affordable Care Act loom as a negative.
Even though for-profit hospital companies continue to post "weak" operating trends, Fitch analysts do not expect to downgrade their credit ratings in the second half of 2012. "Companies in the Fitch-rated group have adequate headroom in financial and credit metrics relative to current ratings, with credit profiles supported through adequate liquidity, manageable debt maturities and growth contributed through recent acquisitions," according to the news release.
In the second quarter, same-hospital admissions among several for-profit hospital companies — including Nashville, Tenn.-based Hospital Corporation of America and Franklin, Tenn.-based Community Health Systems — dropped 2.7 percent on average. Adjusted admissions were almost flat at 0.5 percent. Fitch attributed the slow volume numbers to persistently high unemployment rates.
However, the growth in revenue signaled a positive for the industry, although payment challenges such as Medicare cuts through sequestration and the Patient Protection and Affordable Care Act loom as a negative.
Even though for-profit hospital companies continue to post "weak" operating trends, Fitch analysts do not expect to downgrade their credit ratings in the second half of 2012. "Companies in the Fitch-rated group have adequate headroom in financial and credit metrics relative to current ratings, with credit profiles supported through adequate liquidity, manageable debt maturities and growth contributed through recent acquisitions," according to the news release.
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