Nonprofit health system and hospital downgrades outnumbered upgrades by a ratio of 3-to-1 in the third quarter, Fitch said in an Oct. 18 public finance report.
And such a trend is likely to continue for the foreseeable future as staffing costs remain elevated amid tighter operating margins, according to the report.
Overall, six healthcare ratings were downgraded and only two upgraded in the third quarter period. Negative outlooks are three times as high as positive ones, the report said.
While there have been signs of operating improvement, the pace of that was described by Fitch as "more sluggish than expected."
The pace of possible healthcare mergers and acquisitions, however, will likely increase as systems seek solutions to the tighter operating environment. That's despite increasing regulatory and legislative resistance to such activity, the report said.
Sayre, Pa.-based Guthrie Clinic; Decatur, Texas-based Wise Health; and West Reading, Pa.-based Tower Health are among the systems experiencing Fitch downgrades in the quarter. More details can be found in the report and here.