Not-for-profits could have a bleak year

Two key credit ratings services--Moody's Investors Service and Fitch Ratings--believe the outlook for the not-for-profit healthcare sector will remain negative this year, says the Healthcare Financial Management Association.

According to Moody's, negative factors for not-for-profits include listless patient volumes, hospital revenue stream pressures, problems finding additional cost-cutting methods, debt structure and liquidity risks, large capital requirements, and the coming end of the federal stimulus program in December. Positives include strong management, a partial recovery of the equity and debt markets, and expected growth in mergers and acquisitions.

Fitch expects not-for-profits to continue to see pressures on revenues, operations, profitability and capital access this year. Like Moody's, the agency believes further cost-cutting might not be possible and even that expense reductions already in place could be unrealistic to sustain.

To learn more:
- read this HFMA report