Fitch revises hospitals' credit outlook to negative

Fitch Ratings yesterday revised its outlook on the U.S. not-for-profit hospital sector to negative from stable, saying investment portfolio losses, increasing uncompensated care and higher capital costs are adversely affecting many hospitals' credit profiles. “Further, state and federal budgetary pressures stemming from the economic downturn are anticipated to constrain governmental reimbursement programs, while the business sector is expected to continue to shift health care costs to its employees,” the credit rating agency said. “These factors, coupled with projections for increasing unemployment over the next several months and declines in acute care utilization, are expected to depress operating profitability for the next few years.” AHA President and CEO Rich Umbdenstock said the Fitch downgrade “reflects the many challenges hospitals are facing every day during this economic crisis.”