Moody’s: Nonprofit Hospitals Returning to Fiscal Health

After several years of forecasting fiscal pain for nonprofit hospitals, Moody’s Investors Service is seeing improvement in the sector’s condition, Modern Healthcare writes. The credit-rating agency upgraded the outlook for nonprofit hospitals to stable, the first time since 2008 it has not issued a negative assessment.

Rising patient volumes and a reduction in bad debt are improving hospitals’ cash flow, particularly in states that expanded Medicaid eligibility, Moody’s said in a report last week. After five years of flat or declining admissions, patients began returning in late 2014 — in part due to pent-up demand among the newly insured — and hospitals have made strides in reducing labor and supply costs. But Moody’s said the positive outlook could be temporary, likely lasting for 12 to 18 months.