Finance, Revenue Cycle & ICD-10

Moody's: Outlook for Non-Profit Healthcare Stays Negative for 2012

Written by Bob Herman | January 26, 2012

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Tags: hospital revenue | non-profit healthcare | non-profit hospital

Strained finances, the transition to a new healthcare delivery system, balance sheet pressures and a still-struggling economy are some of the main reasons the U.S. non-profit healthcare sector has a negative outlook for 2012, according to a Moody's Investors Service report.

Moody's Vice President and Senior Analyst Brad Spielman authored the report and added the sector has had a negative outlook since 2008 due to the economic and regulatory risks.

Pressure has especially intensified on non-profit hospitals' revenue streams — most notably Medicare, Medicaid and commercial payors. The governmental payors are reducing reimbursements, while commercial payors — usually a bastion of higher reimbursement rates — are keeping their payment increases low and are decreasing in some areas.

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"Ongoing uncertainty about changing regulatory requirements, healthcare reform and severe federal budgetary stress is putting pressure on hospital management teams as they prepare for the coming era of lower reimbursements and different payment schemes under new business models," Mr. Spielman said in the release.

The report indicated there are some positive trends for non-profit hospitals, including a stable merger and acquisition market and low interest rates.