Moody's predicts negative outlook for nonprofit hospitals

Moody's Investors Service said yesterday nonprofit hospitals' growth will remain negative in 2013 for the fifth straight year, Reuters reported.

Although the research firm expects nonprofit hospitals will continue to grow their revenue, that growth rate will diminish because of federal cuts to medical spending, to the tune of $300 billion in Medicare dollars over six years. In addition, unemployment and a still down economy, as well as lower reimbursements from insurers, will affect the growth, Moody's said.

However, collaborative partnerships, including mergers and affiliations, have helped nonprofits.
"Operating margins and leverage metrics have not deteriorated in recent years, despite negative headwinds because management teams have successfully managed expenses in light of weak patient volumes and less robust revenue growth," said lead report author Daniel Steingart, a Moody's assistant vice president and analyst.

Some nonprofit hospitals are getting creative, spending more on aggressive marketing campaigns and capital improvements, including Missouri's St. Francis Medical Center and NewYork-Presbyterian/Weill Cornell, FierceHealthcare previously reported.

For more information:
- here's the Reuters article
- check out the Moody's announcement and report (subscription required)

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