Dive Brief:
- Moody's Investors Service has downgraded the debt of 10 nonprofit hospitals and health systems for the third quarter of 2013, while issuing eight upgrades, according to Becker's Hospital Review.
- Downgrades have outnumbered upgrades in each of the first three quarters of this year, as well as the fourth quarter of 2012.
- So far in 2013, there have been 30 hospital downgrades as compared with 18 upgrades, with $10.3 billion in debt affected by the downgrades.
Dive Insight:
According to Moody's, decaying hospital debt ratings are driven by several factors, including the rise of high-deductible health plans, and reduced patient volumes as admissions move to short observation stays. Given how common high deductible plans are under health reform, saddling patients with paying huge bills they can't pay, hospital debt quality may not improve that much as patients get insured. Expect to see increased levels of hospital mergers as those with slipping numbers seek a means of improving their market position.