Moody's: Nonprofit hospitals continue to face economic, budget challenges

According to Moody's Investors Service, there were more downgrades than upgrades among nonprofit hospitals, an indicator driven by the slow economic recovery, growing stress on state budgets and the mounting federal deficit.

Reuters: Economy, Budget Woes Threaten Non-Profit Hospitals: Moody's
The number of rating downgrades for non-profit hospitals outpaced upgrades in the first quarter of 2012, Moody's Investors Service said on Monday, adding it remains cautious about the effects of a slow economic recovery, federal deficit cutting measures and state budget pressures on the sector (Lambert and Trokie, 7/23).

Modern Healthcare: Credit Downgrades Outnumber Upgrades: Moody's
As the operating environment continued to challenge not-for-profit providers, Moody's Investors Service last quarter downgraded 32% more hospital debt than it upgraded. … "The increased proportion of downgrades were driven by the continued slow economic recovery, increasing pressure on state budgets, and a large and growing federal deficit," said Carrie Sheffield, author of the Moody's report, in the release. "The deficit problem may lead to reductions in Medicare and Medicaid, which translate into weak volumes and revenue declines for hospitals" (Kutscher, 7/23).