iProtean—Moody’s Releases Mid-Year 2012 Outlook

Moody’s Investor Service recently released an update of its 2012 outlook for not-for-profit hospitals, noting that the negative outlook remains but emphasizing both established risks and developing trends that have become more prominent over the last nine months.  (Not-for-Profit Healthcare Mid-Year 2012 Outlook: Strong Headwinds Continue, Moody’s Investors Service, August 2012.)


According to the authors of the mid-year 2012 outlook, the established credit risks for hospitals include:

  • Revenue growth remains low by historical standards—“significant” revenue pressure is expected as the industry adopts new reimbursement methodologies and CMS lowers annual increases.
  • Challenges from transition to new payment methodologies—reimbursement tied to quality of care and bundled payments are resulting in “significant” IT investments.
  • Economic recovery is sluggish—patient demand will continue to soften; balance sheets remain exposed to “significant” investment risk; efforts to address the federal deficit and the impact on Medicare/Medicaid may lead to a further reduction in reimbursement.


The developing risks include:

  • The Supreme Court ruling allows states to opt out of Medicaid expansion—the decision weakens the impact of “one of the most credit positive aspects of the law.”
  • Hospital-insurer collaboration is on the rise—hospital acquisitions of or collaborations with insurers are increasing; the resulting contracts/collaborations increase hospitals’ risk.
  • Growing acquisition of physician practices and other healthcare providers—bundled payments and greater financial risk for quality are pushing hospitals to pursue acquisitions across the continuum of care and resulting in greater risk.


In the iProtean courses focusing on finance, Lisa Goldstein of Moody’s Investors Service addresses hospital financial integrity and managing risk from a credit rating perspective.  The finance courses are:  Introduction to Finance, Financial Statements & Ratios, Bond Financing Parts 1 and 2, Managing Risk, The New Healthcare Business Model and Mergers & Acquisitions.


Ms. Goldstein will present Moody’s perspective on credit risk, mergers and acquisitions and more at the iProtean Symposium, October 10-12, 2012, at the Lodge at Torrey Pines, San Diego, CA.  For more information, see the link below.


iProtean subscribers:  to read the full article referenced above, go to any of the iProtean Finance courses and click on the Resources tab.



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iProtean Symposium & Workshop

Mark the Date!! October 10 – 12, 2012 at The Lodge at Torrey Pines, La Jolla, CA. Faculty: Barry Bader, Monte Dube, Esq., Lisa Goldstein, Dan Grauman, Marian Jennings and Brian Wong, M.D. For more information, click here.


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