Moody's affirms outlook on nonprofit healthcare sector

Moody's Investors Service has affirmed its stable outlook on the nonprofit healthcare and hospital sector.

The rating agency said business conditions for nonprofit healthcare organizations are favorable with growing patient volumes and low rates of uninsured. Medicaid expansion has been largely credit positive for hospitals in expansion states, as it has been a key factor in reducing the uninsured rate, according to Moody's.

Moody's expects operating cash flow growth in the sector to slightly moderate but remain positive over the next several quarters. The agency also expects expenses to rise due to growing drug costs and continued investments in staffing and population health strategies.

Moody's originally changed the sector's outlook from negative to stable in August 2015.

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