TEXT-Fitch: 2013 outlook for non-profit hospitals stable

Wed Dec 12, 2012 12:24pm EST

Dec 12 - Management's initiatives toward stable operating performance
support a stable outlook for nonprofit hospitals and healthcare systems in 2013,
according to a new Fitch Ratings report.

'A continued focus on operating efficiency, stable reimbursement levels, modest
managed care rate increases, and a higher than expected 2013 Medicare market
basket increase all contribute to a stable landscape,' said Jim Lebuhn, Senior
Director. 'However, Fitch believes there is increased uncertainty beyond 2013 as
opportunities for further cost cutting wane and a wave of expected reimbursement
reductions are realized under the full implementation of the Patient Protection
and Affordable Care Act (PPACA) beginning in 2014.'

Providers have been preparing for a move away from a fee-for-service environment
to one that is focused on quality and cost. The full financial impact of PPACA
remains uncertain as reduced reimbursement for Medicare and Medicaid should be
mitigated by the expanded coverage for the uninsured through the creation of
health insurance exchanges and expansion of Medicaid eligibility.

The hospital industry is facing an automatic 2% reduction in Medicare
reimbursement beginning in January 2013 if the federal government fails to avoid
the fiscal cliff. Although any reimbursement reduction is viewed negatively,
Fitch believes hospitals should be able to absorb the impact of the reduction
since many use conservative assumptions surrounding governmental reimbursement
in their budgeting process. However, lower-rated credits are expected be
affected to a greater degree than higher-rated credits.

Fitch will host a conference call to discuss its 2013 U.S. Nonprofit Hospitals
outlook on Dec. 13th at 2pm EST.

Dial-in details are:
U.S. Participants: +1-877-467-8597
International Participants: +1-706-643-6296
Conference and Replay ID: 73935205

Replays will be available for 30 days. Replay dial-ins are accessible using the
following numbers:
U.S. Replay: +1-855-859-2056
International Replay: +1-404-537-3406

The full report, titled '2013 Outlook: Nonprofit Hospitals and Healthcare
Systems', is available on the Fitch Ratings web site at 'www.fitchratings.com'.

Contact:

Jim LeBuhn
Senior Director
+1-312 368-2059
Fitch, Inc.
70 West Madison Street, 11th Floor, Chicago, IL 60602

Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email:
elizabeth.fogerty@fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: 2013 Outlook: Nonprofit Hospitals and
Healthcare Systems

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FITCH: 2013 OUTLOOK FOR NON-PROFIT HOSPITALS STABLE DESPITE MOUNTING PRESSURES
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