The change in outlook, which updates a similar report issued in September, was attributed to a number of factors including a tightening credit market and likelihood of a longer recession, according to a statement from Moody’s.
"While most hospitals showed resiliency when initial economic weakening began in late 2007, we have begun to see in recent months greater-than-anticipated erosion in performance and liquidity," said Lisa Goldstein, Moody’s senior vice president and author of the report, in the statement.
Ms. Goldstein also noted that some larger, more stable hospital systems are facing challenges due to bad debt levels, increases in charity care and declines in volume, particularly relating to lucrative surgical cases.
It will therefore be critical for hospitals — over the next year or two — to make smart decisions about operating costs and capital investments, and also have strong oversight and leadership from their boards, Ms. Goldstein said.
The report is titled "Not-for-Profit Healthcare Sector: Industry Outlook Revised to Negative from Stable."
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
