Moody's pans profit outlook for for-profit hospitals

Yesterday, we told you about a study [1] concluding that more than 50 percent of U.S. hospitals were in the red. Now, Moody's Investors Service has chimed in with its own gloom and doom, offering a prediction that for-profit hospitals will continue to deteriorate financially throughout.

The reasons Moody's cites for the decline are no surprise: They include the still-rotten economy, problems with patient volume and growing bad debt costs.

Volume is likely to stay flat as patients postpone elective procedures, many of which come with high co-payments these days. And analysts there only expect bad debt to get worse as the economy continues to struggle, and laid-off workers lose their health insurance. What's more, hospitals will have trouble raising prices, which only adds insult to injury.

That being said, Moody's notes that at least for now, the for-profits it rates still have enough cash and revolving credit to keep going. It anticipates that they'll cut costs and capital investments to keep afloat. In other words, it could be worse, though not by much.

To learn more about this research:
- read this Moody's press release [2]

Related Articles:
New research says U.S.hospitals in trouble [1]
AHA survey: Negative profit margins for hospitals [3]
MA hospital profits double since 2004 [4]
Moody's shows little enthusiasm for non-profit hospital finances [5]