Private: Industry News

Economic Outlook for Not-for-Profit Hospital from S&P

by Serra Health | posted: 7 years ago

Economic Outlook for Not-for-Profit Hospital from S&P

As it’s now being called, the Great Recession, which began in 2008, impacted every industry in some way, and many – if not most – have had to adjust to the economic changes that have come in its wake.

In terms of the nation’s hospitals, Standard & Poor’s (S&P) not-for-profit healthcare group managing director Martin Arrick offered this view: As a whole, the sector has performed well, but its flexibility and adjustments in finances, etc., have not been enough to counteract larger factors at play.

What are those factors?

  • Lower patient volume
  • Competition for patients
  • Weakened revenue streams
  • Pressure for infrastructure improvements
  • Decline in business from commercial payers

As a result of these forecasted long-term trends, Arrick says the S&P downgraded its rating for not-for-profit hospitals due to these demands on their finances. Though the Affordable Care Act (ACA) did help increase the number of insured individuals, the following increase in patient volume is likely temporary.

The S&P will look into revising the criteria it uses to evaluate not-for-profit hospitals; however, in the meantime, these hospitals will need to continue to figure out ways to survive in this new economic climate. Working with consultants, like those at Serra Health, can help. They are professionals who have worked in the healthcare industry and understand the changing landscape of healthcare law, operations, finances, and technology.

Check out the full article about the S&P’s decision here.

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