Nonprofit, Public Hospitals To Face Weak Cash Flow, Report Says

Jan 2, 2019

A Moody’s Investors Service report predicts nonprofit and public hospitals will face flat or declining cash flow this year.

The report says that’s because of rising operating costs, a nursing shortage and lower reimbursement rates from health insurance companies.

Safety Net Hospital Alliance of Florida Director Lindy Kennedy says nonprofit and public hospitals already are feeling pressured by cuts especially from Medicaid.

“Our payer mix is largely Medicaid. Which doesn’t even come close to paying for cost. Most hospitals including our safety nets lose about 40 cents on every dollar of care provided to a Medicaid patient.”

Florida Hospital Association President Bruce Rueben adds growing bad medical debt only compounds on the problem. That’s when patients with high deductible plans who are otherwise covered can’t pay for medical services.

“Obviously those are unmet costs and hospitals are forced to cover those costs. There’s more pressure on commercial insurance rates to cover those costs.”

The report says mergers and acquisitions are a way hospitals can make up for financial losses. Moody’s Investors Service provides international financial research.