S&P: Wine and roses for hospitals

A new report by Standard & Poor's concludes many not-for-profit hospitals have built back their finances to pre-2008 levels, but little upside remains for future growth.

"With pending budget sequestration at the federal level, health reform implementation, and continuing pressure on state budgets, we believe the next several years will be difficult for most providers," the S&P report states, according to Reuters.

"Furthermore, we believe that the improvements of the past several years may be reaching their limit and thus will not be able to keep pace with longer-term revenue pressures, especially in light of weaker volumes."

The rating service noted many not-for-profit institutions have made strides in improving their balance sheets and ratios in recent years, but "the first half of 2012 has been somewhat difficult for many providers, with various factors pressuring results, including declining inpatient volumes, increased expenditures related to health reform readiness such as information technology, and the continued escalation of physician employment," S&P said Monday in a statement.

S&P expects to issue more downgrades in the coming years, and that the trend of improving financial ratios is unlikely to continue, according to Reuters.

To learn more:
- read the Reuters article
- here's the S&P report and statement (free registration required)

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