Year-over-year operating trends remained weak for Fitch-rated for-profit hospitals in the third quarter of 2011, and it appears unstable patient volumes, weak payor mixes and low government payor reimbursements will continue in 2012, according to a recent Fitch Ratings (pdf) report.
Fitch analysts said because for-profit facilities are especially tied to patient volumes and payor mix, poor operating trends could put profitability and cash growth at risk. However, profitability and cash flow could benefit from low inflation in labor and supply costs and by cost-control initiatives.
Several Fitch-rated hospital chains — including Nashville, Tenn.-based Hospital Corporation of America, Naples, Fla.-based Health Management Associates, Dallas-based Tenet Healthcare and Franklin, Tenn.-based Community Health Systems — refinanced debt within the past few months, pushing a majority of the debt maturities to 2018 through 2020. Currently, HCA is the only Fitch-rated hospital company with "sizeable" maturities before 2014, according to the report.
Fitch analysts said because for-profit facilities are especially tied to patient volumes and payor mix, poor operating trends could put profitability and cash growth at risk. However, profitability and cash flow could benefit from low inflation in labor and supply costs and by cost-control initiatives.
Several Fitch-rated hospital chains — including Nashville, Tenn.-based Hospital Corporation of America, Naples, Fla.-based Health Management Associates, Dallas-based Tenet Healthcare and Franklin, Tenn.-based Community Health Systems — refinanced debt within the past few months, pushing a majority of the debt maturities to 2018 through 2020. Currently, HCA is the only Fitch-rated hospital company with "sizeable" maturities before 2014, according to the report.
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