Hospital industry may hit rough patch, Moody's warns
By Bruce Japsen | Tribune staff reporter
The nationâ€™s hospitals, which have enjoyed steady and even improving finances in recent years, could see some rough times ahead, according to a new report.
New York-based Moodyâ€™s Investors Service, which provides financial ratings and evaluates debt of the nationâ€™s nonprofit hospitals, said its â€œstableâ€? outlook for 2008 will be less certain in 2009 and 2010 should the economy take a turn for the worse.
â€œAlthough the U.S. economy may be headed into recession, we maintain a stable outlook for 2008 because a negative economic downturn will take longer than a year to materially affect the broad credit position of not-for-profit hospitals,â€? said Lisa Goldstein, senior vice president for Moodyâ€™s public finance group who wrote a report on the nonprofit hospital sectorâ€™s outlook.
â€œOur outlook for 2009 and 2010, however, is less certain as several industry challenges may outweigh the positive factors,â€? Goldstein said. â€œThese include uncertainties about the outcome of the 2008 presidential election and the persistent scrutiny of the not-for-profit hospital industry, and the rising numbers of uninsured and underinsured patients.â€?
More hospitals are turning to mergers and acquisitions as a way to gain economies of scale and clout with health insurance companies who pay for hospital medical services in the face of increasing numbers of uninsured patients who cannot pay their medical bills. In addition, hospitals are looking at mergers and other strategic initiatives as a way to raise cash to expand and upgrade facilities.
In the Chicago area, Advocate Health Care, the areaâ€™s largest provider of medical care, said it was in exclusive merger talks with Condell Medical Center in Libertyville. Other hospitals, too, are looking at various options that include buyouts such as Rush North Shore Medical Center in north suburban Skokie.
NIH appointment for Cancer Treatmnet exec: Timothy Birdsall, an executive at Zion-based Cancer Treatment Centers of America, has been appointed to a four-year term on the National Advisory Council for Complementary and Alternative Medicine for the National Institutes of Health.
In his role, Birdsall, Cancer Treatmentâ€™s vice president of integrative medicine, will join an 18-member council that assists and advises the Director of the National Center for Complementary and Alternative Medicine on a variety of functions including review of grant applications. The appointment was made by U.S. Health and Human Services Secretary Michael Leavitt.
Cancer Treatment Centers operates a chain of hospitals that offer traditional treatments of cancer surgery, chemotherapy, radiation and stem-cell transplants, along with other alternative medical care services such as organic food, vitamin therapies, massage and nutrition. Its services include hospitals in Tulsa, Philadelphia and Zion, where its flagship Midwestern Regional Medical Center is located.