Moody's: Non-Profit Hospital Medians Stable in FY 2011, But Changes Loom

Non-profit hospitals made effective adjustments to their fiscal plans in fiscal year 2011, which led to stable median financial ratios, but healthcare reform, federal deficit pressures and continued slumps in patient demand may cause challenges, according to a report from Moody's Investors Service.

"While median revenue growth showed an uptick to 5.3 percent in FY 2011, it remained low by historical standards and will likely fall again in coming years due to tightening federal funding," said Sarah Vennekotter, Moody's assistant vice president and analyst and author of the report.

Moody's analysts said non-profit hospitals improved their balance sheet measures in FY 2011, and most had highly liquid cash and investment portfolios. However, many hospitals are experiencing "stagnating" balance sheets now after soft returns on equity in the past 12 months.

Standard & Poor's Rating Services issued a similar report earlier this month, saying hospital CEOs, CFOs and others within the industry have focused on shoring up their balance sheets and income statements, but new pressures — such as declining inpatient volumes and increased expenses due to healthcare reform — could force the metrics down.

More Articles on Hospital Medians:

S&P: New Pressures Could Upend Hospitals' Stable FY 2011 Median Ratios

5 Observations on the State of Hospital Credit Markets

58 Statistics on FY 2011 Median Hospital Financial Metrics

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