Dive Brief:
- Moody's Investors Service predicts that nonprofit hospital bond downgrades will outpace upgrades again during the fourth quarter of this year.
- The agency cited declines in admissions averaging 5.3 percent as compared with fiscal 2011-2012 as a key reason for the expected downgrades.
- Downgrades already surpassed upgrades during the third quarter of this year, with the downgrades affecting $2.7 billion in debt.
Dive Insight:
Hospitals are being affected by many trends that impact their profitability, notably low-paid observation stays and rising co-pays and deductibles which lead to unpaid bills. It's little wonder that many hospitals are choosing to buy medical practices, a move which helps to capture admissions. In theory, patient volumes should increase as more consumers become insured through the exchanges, but if those plans include high deductibles, hospitals will have trouble collecting on fees for their care. All in all, this is particularly tough time to be in the hospital business.