Fitch: Clouds ahead for hospitals in 2013

Fitch Ratings is forecasting slow to moderate growth for companies in the healthcare sector for 2013, citing the potential fallout from the fiscal cliff as imperiling revenues.

The report concludes that healthcare providers are "the most directly exposed" to the fiscal cliff, as well as "the most vulnerable" to its effects.

"This group is exposed directly through the sequester of Medicare payments, and indirectly through a potential decline in patient utilization, should elements of the fiscal cliff reduce economic activity and increase unemployment," according to the report.

Individual physicians would be hit particularly hard by the sequestration of Medicare payments, according to Politico.

To endure sequestration, healthcare organizations must maintain successful cost management strategies and procedures, Fitch stated.

The rating agency also noted that outside of the the fiscal cliff issue, most healthcare operators are in fairly strong financial shape.

"Most companies in the Fitch-rated portfolio are generating cash well in excess of reinvestment requirements despite a weak operating environment," Fitch said in a statement. "Fitch believes companies could increase spending on M&A, dividend and share repurchases later in 2013, pending clarity on U.S. deficit reduction measures and the stabilizing Eurozone situation."

To learn more
- read the Fitch report (subscription required)
- here's the Fitch statement
- read the Politico article

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