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Moody’s Says Hard Times Ahead for Nonprofit Hospitals

June 15, 2012, 10:48 am

A new report by credit-rating agency Moody’s says nonprofit hospitals will face hard times regardless of the Supreme Court’s ruling on a challenge to President Obama’s health-care law, says Reuters.

No matter which way the court goes, policy makers must still address the budget deficit, “which almost certainly will include altering federal funding for Medicare and Medicaid,” according to the report issued Thursday. Nonprofit medical centers rely heavily on compensation from the state- and U.S.-funded programs to care for the poor and elderly.

The best outcome for nonprofit hospitals would be full confirmation of the new health-care law by the Supreme Court, as that would not affect their credit rating, but it would not change the overall negative outlook, Moody’s said.

Striking down the most controversial aspect of the law—the mandate that all individuals buy health insurance—or throwing the measure out altogether would both be “credit negative” for nonprofit hospitals.

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