Fitch Ratings: Nonprofit hospitals can manage omicron despite challenges

A report by credit ratings agency Fitch Ratings concludes that the omicron coronavirus variant, although highly transmissible, will not have a major effect on nonprofit hospital operations and cash flows.

Despite this, hospitals are preparing for another COVID-19 surge this winter, and if omicron turns out to be more dangerous than anticipated, it could create more challenges on operating margins, according to a Dec. 8 report, which was emailed to Becker's.

Lower rated and generally smaller hospitals operating with little capacity are less suited to handle financial problems. These challenges include a decline in reimbursement, lower elective volumes and increases in expenses, according to the report.

Higher rated hospitals have more flexibility to take on these challenges. However, they could experience more difficulty if COVID-19 "shocks" continue, the report said.

"Hospitals are remaining vigilant in the midst of an evolving situation but continue to be pressured by a shortage of healthcare workers, high turnover and, in many areas at the moment, high coronavirus infection and hospitalization rates," Kevin Holloran, senior director of Fitch Ratings, said in the report. "Hospitals that are already overwhelmed with coronavirus cases have limited capacity to treat additional patients and some have paused higher reimbursement elective procedures as a result. The risk of severe illness among patients with other health issues also increases as care is delayed due to the pandemic."

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