Moody's: Stimulus may not have big healthcare impact

In theory, the impact of $787 billion in federal stimulus spending should be dramatic--but that doesn't mean everyone benefits equally. And according to a new report from Moody's Investors Service, non-profit hospitals aren't likely to be big winners in this game, at least when it comes to their financing arrangements.

Moody's, which took a look at what benefits planned stimulus spending would provide to municipal bond issuers, concludes that while such bondholders would see some benefits--notably funding and tax benefits available over the next two years--they wouldn't see much of a gain over the long term.

That's not great news for hospitals, which have had to scale back their capital investments dramatically for lack of access to the bond market. Some of them aren't going to be funding-ready within two years, as many will still be recovering from the blows they've taken during the recession. And if the bond market doesn't soften, they won't find investors later.

True, not-for-profit hospitals will get some help in the form of a temporary increase in the Federal Medical Assistance Percentage, but they'll still be contending with rising volumes of uninsured patients, health plan cutbacks and increasingly close scrutiny of their community benefit spending. Not much of a deal, all told.

To learn more about the Moody's report:
- read this HFMA News piece

Related Articles:
Economic stimulus may send $100B-plus to healthcare
House stimulus package includes help for bond market

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