Repeal of health reform would 'constrain' hospital profits

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A new report by Moody's Investors Service paints a dark picture if the Patient Protection and Affordable Care Act is repealed by the U.S. Supreme Court, The Washington Post reported.

"If the law is fully or partially repealed, for-profit hospital operators' costs of treating patients unable to pay their bills would rise, and would limit operators' revenue growth and profit margins and constrain cash flow," Moody's Senior Credit Officer Dean Diaz said in a statement.

Moody's also warned that without the ACA's expansion of the pool of insured patients by about 30 million, more financial pressure would be placed on for-profit hospital operators. It noted the chains most vulnerable to such pressures would be HCA Inc., Community Health Systems and Tenet Healthcare Corp. Specialty operators such as Kindred Healthcare and Select Medical Holdings Corp. would feel less of an impact, primarily because they do not operate emergency rooms and therefore treat far fewer uninsured patients.

And while repeal by the Supreme Court also would eliminate the $155 billion in Medicare cuts that come with the Affordable Care Act, hospitals and other providers would face potentially deeper cuts, given even more Draconian spending proposals put forward by Rep. Paul Ryan (R-Wis.) and other House Republicans, the Huffington Post noted.

For more:
- read the Washington Post article
- here's the Moody's statement (.pdf)
- read the Huffington Post article

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