Despite Merger Activity, Negative Credit Conditions Persist
Moody's, the giant credit rating agency, recently reported good news about upgrades in healthcare credit ratings for the quarter, and then proceeded to dump a bucket of cold water over everything.
Despite the fact that upgrades exceeded downgrades in the nonprofit hospital and health system sector by a ratio of 3.3-1 in the third quarter, Moody's says the high number of upgrades is the result of an increase in merger and acquisition activity. It is not due to a fundamental change in underlying negative credit conditions, the agency suggests.
That makes sense. One quarter does not portend a trend.
But broadly, mergers are supposed to drive efficiencies, and to some degree, efficiencies can have a big impact on margins. So how to gauge the state of the healthcare game as the chess pieces rearrange themselves as never before?
Lisa Martin, senior vice president in the Moody's Healthcare Group, says that regardless of the news about credit upgrades, "it just so happens that in this quarter, there were more positive rating actions than negative."
- Technology Lights Up Health Innovation Forum
- NCQA Releases Annual Health Plan Rankings
- Few Winners Among MSSP Participants
- Data Points to Boom in Private HIX
- How much does that x-ray cost? You can find out in NH
- When a hospital closes
- Anthem Blue Cross, 7 CA Health Systems Create New Challenger, Business Model
- Interstate Medical Licensure Effort Advances
- Administration: 7.3M now enrolled in Obamacare
- US health system among least efficient before Obamacare