WASHINGTON, April 25 Small, not-for-profit
hospitals remained on shaky financial footing at the beginning
of the year, with Moody's Investors Service on Thursday saying
it had downgraded more hospitals than it upgraded in the first
The rating agency downgraded six hospitals, five of which
had less than $500 million in revenues. It also expects more
downgrades in the second quarter.
"Almost all rating downgrades were small-sized providers
continuing a trend we have seen for several years. Small
hospitals are unable to absorb the reimbursement pressures
facing the industry," said Moody's Associate Managing Director
Lisa Goldstein, in a statement. "Two of the three upgraded
providers have over $500 million in revenues and all
demonstrated multiple years of improved financial performance."
The credit rater warned in January that 2013 would be tough
for the not-for-profit hospitals that often serve communities
dominated by low-income families. It has had a negative outlook
on the sector for five years, reflecting the hospitals' swell of
patients during and after the recession, as well as changes in
how they are reimbursed by federal programs under the new
The hospitals have limited leverage, lack economies of scale
and have an "over-reliance on a few key physicians" as well,
Moody's said on Thursday.
Still, the agency also affirmed 55 ratings and changed fewer
non-profit hospitals' ratings than in the first quarter of 2012.