Dive Brief:
- Fitch Ratings has come out with a report which, like prior analyses by Moody's and S&P, suggests that non-profit hospitals and health systems will face a negative operating environment next year.
- Pressures on non-profits include Medicare cuts, Medicaid funding issues, declining inpatient volumes and the increasing presence of high-deductible health plans.
- Fitch suggests that hospitals and health systems will depend on how leaders control expenses, create clinical efficiencies and hold down staffing costs; they may also need to cut back or drop less profitable service lines.
Dive Insight:
Well, it's official: Fitch, S&P and Moody's all agree that next year will be a very tough one for non-profit hospitals and health systems on a number of fronts. As the non-profits take a financial battering, they're likely to take a closer look at merger options. Even those that succeed in maintaining their independence are likely to strike tightly-knit partnerships that help them carry infrastructure and staffing costs, whether they want to or not. All told, when it comes to nonprofit hospital relationships, the coming year may be one for the record books.