Fitch: Investor-owned hospitals have strong operating earnings

Things have been incredibly tough over the past couple of years, both for non-profit and investor-owned hospitals. But despite decreasing patient volumes, rising bad debt and price pressures, investor-owned hospitals have managed to post strong operating earnings for the quarter ended March 31, according to Fitch Ratings.

In a recent report, Fitch notes that EBITDA was up 10 percent for the 12 months ended March 31, as compared with the previous year's period, despite the pressures they face. Given this success in boosting operating earnings, the companies have been able to lower their debt-to-EBITDA ratios by 5 percent in the three months between Dec. 31 and March 31 alone, Fitch said.

Fitch notes that part of the reason such hospitals have stayed afloat may be cost controls. Investor-owned firms have cut or canceled employee merit increases, benefits and the use of contract labor, and some have ratcheted down supply and malpractice costs.

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

Related Articles:
Fitch issues negative ratings for healthcare
Fitch changes not-for-profit hospital outlook to negative
Fitch: For-profit providers stable in Q4 2008

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