Not-for-Profit Provider Outlook 'Negative,' Says Moody's

John Commins, for HealthLeaders Media , January 27, 2012

Bruce McPherson, president and CEO of the Alliance for Advancing Nonprofit Health Care, says the Moody's report raises legitimate concerns, but "overall they are more negative than I am."

"I don't disagree that there are a lot of financial challenges out there," McPherson told HealthLeaders Media. "But the hospital leaders that I talk to are pretty well on top of the challenges and are making very good progress in addressing them in terms of finding additional efficiencies and ways to improve quality. It's hard for anyone right now is on the investment side. What is a safe place to invest funds and make some sort of return? That non-patient care side of it is a real guessing game."

Martin and McPherson agree that the tough economy is forcing not-for-profit providers to run lean operations, and that is a good development.

"In this environment we are seeing more of the stronger management teams focusing on a number of areas and trying to be proactive ahead of some of the pressures that are coming," Martin says. "These management teams are focusing on being more efficient."

"In order to offset some of the revenue pressures there is a lot of focus on the expense side management," Martin says. "It's what I would call the first tier of expense management, things like restructuring employee benefits, in some cases downsizing the workforce to increase productivity. It is consolidating certain vendor contracts. It's what I would classify as blocking and tackling initiatives."

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1 comments on "Not-for-Profit Provider Outlook 'Negative,' Says Moody's"

bob (1/27/2012 at 9:45 AM)
I share Bruce McPherson's optimism. Clearly, there will be less income, but that is a necessary good thing for the economy, especially when leading providers are able to reduce expenditures without adverse impact on access as well as positive impact on so many are demonstrating.




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