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

John Commins, for HealthLeaders Media , January 27, 2012

The economy is still too soft to change the negative outlook for not-for-profit healthcare providers in the United States in 2012, and that outlook may stay negative "for at least the next several years," says a report from Moody's Investors Service.

The bond rating agency's healthcare group is holding firm to the negative outlook it has maintained since 2008, based largely on issues that are beyond the control of providers.

The main reasons for the continued negative outlook include modest revenue growth for hospitals over the next 18 months, an expectation of continued "softness" in the economy, and challenges created by the care, payment, and regulatory transitions mandated by the Affordable Care Act, Moody's said.

"While performance in the sector is expected to remain variable in 2012, with certain organizations performing well despite the challenges, the preponderance of credit factors facing the industry is unequivocally negative, and is expected to remain negative for at least the next several years," the report stated.

Lisa Martin, senior vice president of Moody's Healthcare Group, says that any change in the dour outlook will depend upon what happens in the larger economy.

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

bob (1/27/2012 at 3:21 PM)
I agree with Bruce McPherson's more positive perspective. In the face of inevitable reductions in operating income during the next decade, leading providers are demonstrating that expenditures can be reduced without adverse effects on access and with improvement in quality of care.




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