Hospital mergers may enhance debt ratings, Moody's says

A wave of hospital mergers, driven partly by the slow economic recovery, reduces financial risks for many institutions and may boost credit ratings in the $3.7 trillion municipal bond market, Moody's Investors Service said. Reimbursement pressures and rising costs coupled with the prospect of "healthcare reform and an unsustainable payment system" have driven not-for-profit hospitals to look for partnerships, Moody's said in a report released Thursday. Smaller stand-alone hospitals that don't merge with other institutions may have difficulty matching the operating performance and market access of larger multi-hospital systems according to the report.