S&P offers mixed outlook for non-profit healthcare

From where Standard & Poor's sits, there's both good news and bad news when it comes to the not-for-profit healthcare sector. According to a new report from the ratings agency, U.S. Not-for-Profit Health Care Shows Stress as Credit Quality Gap Returns, credit quality is deteriorating under the pressure of a flood of operational and financial issues. On the other hand, many larger systems and well-positioned standalones continue to perform, according to the firm. Still, rising debt and big capital spending plans are a drag on both strong and struggling providers, S&P noted.

One reason S&P is raising this alarm is because the sector's credit rating trends slid to negative faster than expected in the second half of 2007 because of, among other things, slimmer, weaker balance sheets and stronger competition. Meanwhile, rising interest rates for auction-rate bonds are not a plus either. Given these stresses on providers, S&P expects to see ratings downgrades exceed upgrades in 2008, with even more downgrades possible in 2009 and beyond.

To learn more about S&P's credit rating predictions:
- read this Modern Healthcare article (reg. req.)

Related Articles:
S&P warns law could hurt non-profits. Report
Health IT plans affect financial ratings. Report

Suggested Articles

The Centers for Medicare & Medicaid Services released the MA plan star ratings for the 2020 plan year on Friday.

A New Orleans-based genetic testing company will pay $42.6 million to resolve False Claims Act and kickback allegations.

FierceHealthcare caught up with former ONC and Veterans Affairs' official Genevieve Morris for our latest Executive Spotlight.