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.