Moody's predicts that non-profit hospitals may sell to for-profits in 2009

Everyone knows that it's not easy being a not-for-profit hospital chain these days. The question is what strapped non-profits--struggling for access to capital on one and and burdened by bad debt on the other--can do to turn their situation around. According to a new report from Moody's Investors Service, financial pressures facing not-for-profit hospitals may force a growing number to sell out to for-profit hospital chains.

As we've reported earlier, some non-profits have experimented with selling out to their doctors and other deal structures, but ultimately, simply turning over the keys may be the only option for some. The for-profit chains have stronger liquidity and unused bank credit still in place from before the credit squeeze, so they're in a position to buy, Moody's notes.

The ratings agency's comments come among a gloom-and-doom report for healthcare generally. Moody's rated the financial health of all four major healthcare sectors (for-profits, not-for-profits, health insurers and medical device makers) negatively for the first time ever in the current report.

To learn more about this report:
- read this Modern Healthcare article (reg. req.)

Related Articles:
Moody's downgrades 18 hospital bond ratings in two months
Moody's says healthcare's vulnerable to economy's ills
Obama healthcare plan a plus for hospitals, Moody's says
Bond buy-backs could stress hospitals' liquidity, Moody's says

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