Not-for-profits could have a bleak year

Two key credit ratings services--Moody's Investors Service and Fitch Ratings--believe the outlook for the not-for-profit healthcare sector will remain negative this year, says the Healthcare Financial Management Association.

According to Moody's, negative factors for not-for-profits include listless patient volumes, hospital revenue stream pressures, problems finding additional cost-cutting methods, debt structure and liquidity risks, large capital requirements, and the coming end of the federal stimulus program in December. Positives include strong management, a partial recovery of the equity and debt markets, and expected growth in mergers and acquisitions.

Fitch expects not-for-profits to continue to see pressures on revenues, operations, profitability and capital access this year. Like Moody's, the agency believes further cost-cutting might not be possible and even that expense reductions already in place could be unrealistic to sustain.

To learn more:
- read this HFMA report

Suggested Articles

In June, the two health systems announced the planned merger deal that would have created one of the 15 largest nonprofit health systems in the U.S.

Atrium Health and Novant Health will join Blue Cross and Blue Shield of North Carolina’s value-based payment program, Blue Premier. 

In two new policy papers, the American College of Physicians recommended changes to help stem the high cost of prescription drugs.