Moody's revises nonprofit health care outlook to negative

Moody’s Investors Service yesterday revised its outlook for the nonprofit health care sector to negative from stable, projecting a continued decline in cash flow through 2018. “Revenue growth is under pressure because of very low reimbursement rate increases, an ongoing rise in government payers and a continued shift to high deductible plans,” the report states. “We expect rapid expense growth to outpace revenue growth with high labor costs, nursing shortages and rising bad debt.” According to the report, growth of government payers “will dampen revenue growth for the foreseeable future due to a rapidly aging U.S. population and low reimbursement rates.” Recent tax proposals from the House and Senate also “would be credit negative for not-for-profit health care,” according to the report.