Moody’s Investor Service gave not-for-profit hospitals a negative outlook last week, saying improvements seen in 2009 are not likely to be sustained in the coming years.
The financial outlook for nonprofit hospital systems improved last year, but the industry must make expense management a continuing focus, said Kay Sifferman, Moody’s senior credit officer. She cited Medicare and Medicaid reimbursement levels as a key factor in the low rating.
Liquidity levels at the nation’s nonprofit hospitals are also still below their 2005 peaks, she said.
The outlook from Moody’s predicts weaker financial performance because of the slow economic recovery, flat volumes as people put off elective surgery, and the growing levels of uncompensated care.