For-profit hospital outlook swings to negative, Moody's says

Moody's Investors Service changed for-profit hospitals' outlook from stable to negative due to how COVID-19 is expected to affect business operations.

Five things to know:

1. Moody's analysts predict that for-profit hospitals' EBITDA will decline by a low-to-mid single-digit rate during the next year to 18 months. Moody's had previously expected EBITDA growth of 3-4 percent.  

2. Hospital profitability will decline as many decide to defer elective procedures to focus on COVID-19 patients. 

3. For-profit hospitals will have a harder time controlling their costs as they pay more overtime, hire contract workers or seek supplies from new vendors. 

4. Since many COVID-19 patients who need treatment are covered by Medicare, hospitals will see their reimbursement fall. 

5. Moody's made similar projections for nonprofit hospitals.

 

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