Moody’s Investor Services Downgrades Hospital Credit Ratings

BOSTON — Moody’s Investor Services, which rates more than 560 hospitals and health care systems around the country, said that downgrades outpaced upgrades 5 to 1 during the second quarter of 2003.
Moody’s says the industry is “moving toward a negative outlook and away from credit stability.”

The second-quarter downgrades are the most in a quarter since at least 1998. Moody’s said the downward trend results from the rate pressures from Medicaid and commercial payer reimbursements, volume declines, or “new physician ventures that cannibalized existing hospital services.”