Moody's: Outlook negative for nonprofit hospitals

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The outlook for U.S. nonprofit hospitals remains negative for 2021, Moody's Investors Service said in a report published Dec. 11. 

Patient volume disruption, higher expenses and reduced insurance revenues will weigh on nonprofit hospitals amid the COVID-19 pandemic. The pace of recovery from the suspension of elective surgeries in 2020 will be influenced by the containment of COVID-19 and widespread vaccination, Moody's said. 

"The negative outlook for the not-for-profit and public healthcare sector assumes that COVID-19 vaccines won't be widely available before the middle of next year," Moody's Vice President Diana Lee said. "Meanwhile, soft demand for some services and the ongoing shift toward lower-cost settings will contribute to median operating cash flow dropping 10%-15% in 2021 from our annualized third-quarter 2020 estimate."

Moody's said large health systems with more cash will be better positioned to resume growth, while smaller standalone hospitals will likely consider partnerships. 

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