Moody's shows little enthusiasm for non-profit hospital finances

It's tough to find there, buried within the careful language, but I think the net of the recent "special comment" from Moody's Investors Services might be that the agency is cautiously pessimistic about the financial future of U.S. non-profit hospitals. In the special comment, which addressed its preliminary fiscal 2007 median ratios for not-for-profit hospitals, the agency said that, in essence, while the hospitals are still making it, analysts aren't wild about the future. They note that key volume and revenue growth measures aren't doing much to excite them, which suggests to analysts that full-year fiscal '07 medians may not hold up. Add that to the fact that hospitals are losing ground when it comes to liquidity, and you've got some real concerns for both for-profit and not-for-profit facilities in 2009 and 2010, as the agency noted in January.

What can the hospitals do to avoid a scary future? Well, for one thing, Moody's has let it be known that if they institute quality incentives, non-profit hospitals might get better credit ratings from them. Well, folks, there you have it. Problem solved!

To learn more about Moody's take on not-for-profit hospitals:
- read this HFMA News item

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