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Economic Outlook Not Good for Nonprofit Providers


 

Despite record hospital profits a year ago, Moody's Investors Service lowered the outlook for nonprofit hospitals from "stable" to "negative" in a report issued Nov. 11 in lieu of the recent downturn in the U.S. economy.

Steven Liu, MD, founder and CEO of Atlanta-based hospitalist group Ingenous Med, says the downgrade has "tremendous repercussions" for hospitalists. As hospitals start to lose revenue and look at ways to cut costs, one of the big-ticket items administrators will look at are the subsidies paid to hospitalists, which account for 40% to 50% of hospitalists' revenue, he says.

To combat arguments for decreases in subsidies, hospital medicine group (HMG) leaders need to have data supporting the value of their practice in order to show the various benefits they provide the hospital in terms of growth and quality of care.

Dr. Liu also says HMGs must maximize or protect revenue, and examine expenses carefully. Groups building or expanding must ensure that there are enough patients to care for in order to justify expenses, he says.

"Recession is a time where you focus on the quality of your organization, and it is less a time for taking on contracts and hiring physicians," he says.

Moody's provides research data and analytic tools for assessing credit risk, and publishes market-leading credit opinions. For more information, download the report at www.moodys.com.

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