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August 27, 2014

Moody's Sees More Fiscal Struggle for Nonprofit Hospitals

Nonprofit hospitals had their worst financial showing since the Great Recession last year as expenses rose at a faster clip than revenues, The New York Times writes, citing a new report from Moody's Investors Service. Hospitals revenues increased by 3.9 percent, compared to 7 percent or more in recent years, according to the credit-rating agency, which analyzed 383 health systems' 2013 results.

Nonprofit medical centers' costs have risen at a greater rate than income for the past two years as the federal government and private health plans change the way they pay hospitals in an effort to cut their own expenses. Moody's called the trend "unsustainable" and said it expected "continued financial weakening" even as millions of Americans gain health insurance under the Affordable Care Act and become paying customers.