Up until this most recent financial quarter, Moody's was downgrading and upgrading nearly equal numbers of hospital bonds. In October and November of this year, though, Moody's has downgraded 18 hospital bond ratings and upgraded only one.
That's right, folks: more bad news for hospitals. Moody's cited the softening of revenue, mostly due to patients deferring elective procedures and intensifying competition for insured patients with other hospitals and physician groups. An increase in charity care and bad debt expense, caused by rising unemployment rates, was also cited by the agency.
Though Moody's has been downgrading most hospital bonds, it was quick to note that many hospital management teams have hurried to respond to challenges posed by the recession, delaying non-essential spending and making greater use of board members' financial and investment expertise. Perhaps those steps will slow the bond downgrade process next quarter?
To learn more about the downgrades:
- read this Health Financial Management Association piece