Moody's says healthcare's vulnerable to economy's ills

Classical economics suggests that healthcare enjoys a unique status as an industry--that it's essentially recession-proof given the constant and sometimes rising demand for healthcare services. But that assumption may not hold water during this economic downturn, suggests a new set of reports from Moody's Investors Service.

Moody's has issued reports on a group of healthcare sectors this month, including hospitals and medical devicemakers to health plans, and has revised the 12- to 18-month outlooks from "stable" to "negative." It notes that many discouraging trends are in play, including that less patients are seeking medical care, and many are avoiding elective surgeries. It also notes that more people may lose their healthcare coverage as jobs disappear, potentially leading to a rise in bad debt among some providers.

Non-profit hospitals, in particular, are expected to face struggles, as it's become harder to gain access to tax-exempt bond financing to buy equipment and make capital improvements. Health plans are also in the bullseye, says Moody's, which argues that the plans are likely to see lower margins and slower growth for a number of reasons. 

To learn more about Moody's predictions:
- read this Chicago Tribune piece

Related Articles:
Obama healthcare plan a plus for hospital, Moody's says
Moody's ratings changes could raise healthcare credit ratings
Not-for-profit hospitals financially stable in '07, says Moody's

Post a comment