Outlook remains negative for US for-profit hospitals, Moody’s says

Moodys expects for-profit health centers revenues prior to interest tax devaluation and amortization to decrease by a low-to-mid single-digit rate in the next 12 to 18 months.

” Some health centers have stated that for every single lost dollar of earnings, they had the ability to cut about 50 cents in expenses. However, our company believe that these levels of expense cuts are not sustainable,” Moodys said..

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In addition, volume patterns and acuity levels are most likely to vary significantly for these for-profit providers across the U.S. and the number of treatments performed beyond the health center setting will continue to increase, which will damage healthcare facility earnings, Moodys said..

Further, the credit rating company stated that numerous companies carried out quick and aggressive cost cutting steps, which enabled them to leave the second quarter mainly unharmed..

Overall, Moodys said it expects volumes to slowly return to pre-COVID-19 levels in 2021.

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Moodys Investors Service preserved its unfavorable outlook for U.S. for-profit hospitals due to waning federal aid, shifting payer mixes and differing volume patterns.

Alia Paavola –
Thursday, September 17th, 2020

The credit ranking firm maintained the unfavorable outlook for numerous factors, including that federal government help to companies is beginning to unwind and most companies will see adverse payer mix shifts in the next year due to the high joblessness rate in the U.S..