Just 11% of respondents gave a firm “no” to the notion of a W-shaped recession. These responses echo the sentiments of the financial leaders I spoke with at the HealthLeaders CFO Exchange.
“I don’t see where we really ever left the [last] recession, especially in some areas of the country,” says Michael Burke, senior vice president and vice dean, corporate CFO at NYU Langone Medical Center, a 705-bed acute care facility in New York City. “Healthcare was the last bastion of growth for jobs and now they are going to ratchet it down. … Now they’re implementing massive reductions to the Medicaid program and potentially massive reductions in the Medicare program.”
The debt ceiling crisis put Medicare in the political crosshairs, and as financial leaders know all too well, Medicare rates will be on the chopping block in some capacity. Potential reductions in Medicaid and Medicare, however, pale in comparison to the nation’s larger woes, which will influence healthcare. These include a stagnant unemployment rate, failing banks, high rates of housing foreclosures, and the shaky stock market.
As a result, ratings agencies are keeping a wary eye on healthcare. Two days after the Eastern seaboard survived a significant soaking by Hurricane Irene, Moody’s whipped up a storm of its own with its announcement that its ratings outlook for the U.S. not-for-profit healthcare sector was negative.
"Operating pressure[s] in place when the outlook was changed to negative in October 2008 are fully captured in the underlying trends shown in the fiscal year 2010 medians--namely weaker revenue and volume growth trends," said Moody's vice president and senior credit officer Beth Wexler in a statement.