CHICAGO--(BUSINESS WIRE)--Link to Fitch Ratings' Report: 2014 Outlook: U.S. Nonprofit Hospitals
and Healthcare Systems
The 2014 outlook for U.S. nonprofit hospitals and healthcare is negative, reflecting pressure on patient volume, continued uncertainty related to healthcare reform, and reimbursement challenges, according to a new Fitch Ratings report.
'Slowdown in revenue growth evidenced in 2013 will likely deepen in 2014, driven by the declining trend of inpatient volumes, increasing use of high-deductible health plans, the expectation for another year of Medicare sequestration cuts and lower reimbursement rate increases from both governmental and private insurers,' says Jim LeBuhn, Head of Fitch's Non-Profit Health Care group.
'Despite projected increases in the overall insured population, higher utilization may not equate to improved profitability given the general trend in the shift of services to the outpatient setting.'
The expectation for insurance coverage expansion through the federal health insurance exchange has been severely impacted by the delay and uncertainty of the federal website functionality. While the state run exchanges have had better success, the expectation that 7 million individuals will gain coverage through state and federal exchanges is highly uncertain.
Regardless of timing, Fitch believes the long-term impact to hospital providers in states not expanding Medicaid will be negative.
Given the expected pressure on volumes and reimbursement in 2014, hospital financial performance will be more impacted by management's ability and willingness to proactively control expenses, generate improved clinical efficiencies and quickly flex staffing to changes in patient volume.
Fitch expects mergers and acquisitions activity will continue to be robust, as hospitals seek partners to fulfill varying needs including improving economies of scale, expanding and deepening their market presence or bolstering service offerings across the continuum of care.
Fitch will host a conference call to discuss its 2014 Healthcare Outlook on Dec. 12th at 2:00 PM eastern.
U.S. Participants: +1-877-467-8597
International Participants: +1-706-643-6296
Conference and Replay ID: 17261588
U.S. Replay: +1-855-859-2056
International Replay: +1-404-537-3406
The replay will be available for 30 days:
Fitch's special report titled '2014 Outlook: Nonprofit Hospitals and Healthcare' is available at 'www.fitchratings.com' or by clicking on the above link.
Additional information is available at 'www.fitchratings.com'.