Moody’s: Hospital financial outlook negative as coronavirus constrains cash flow

Moody’s Investors Service today revised its outlook for the U.S. nonprofit hospital and health care sector from stable to negative, saying revenue will likely decline as hospitals cancel elective surgeries and other services to prepare for a surge of coronavirus cases. “At the same time, expenses will rise with higher staffing costs and the need for supplies such as personal protective equipment,” the credit rating agency said. “…Ripple and lingering effects to the economy will also drive lower cash flow even after the outbreak is contained. These include a reduction in the value of hospitals' investment portfolios and potential rising unemployment or widespread layoffs that result in the loss of health benefits. The difficulties facing hospitals come amid increasing cash flow constraints, such as a greater reliance on reimbursement from governmental programs and a continued shift in treatment to less costly settings.”