Not-for-Profit Hospitals Find Opportunity Amid Uncertainty
While the uncertainty around healthcare reform and lower reimbursements will prove a challenge in the near future, hospital leaders also see opportunities to succeed within local markets.
Mina Ubbing President and CEO
Fairfield Medical Center
Moody's Investors Service has for the sixth straight year forecast a "negative" outlook for the nation's not-for-profit hospitals. While the uncertainty around the Patient Protection and Affordable Care Act and lower reimbursements will prove a challenge in the near future, hospital leaders also see opportunities to succeed within their local markets.
Mina Ubbing, president/CEO of Fairfield Medical Center in Lancaster, OH, says the 200-bed, independent community hospital just went through the bond rating process this spring and emerged with a "stable" rating. But she says the "negative" outlook for the industry is understandable.
"There are certainly lots of challenges, and the biggest one truly is the uncertainty of what happening in healthcare reform and the Affordable Care Act," Ubbing told HealthLeaders Media. "There is the whole challenge with the online enrollment. There is a lot of pushback on the narrow networks. You are going to see some antitrust issues coming out of that. So everything is in a state of flux. If I were a lending rating agency, that uncertainty would bother me the most."
In a report issued last month, Moody's cites drops in revenues and inpatient volumes for the negative outlook, and says it expects that not-for-profit hospitals' median revenue growth in fiscal year 2013 will fall to a range of 3% to 3.5% (significantly down from FY2012's 5.2% growth rate) and will remain low in 2014.