Nonprofit hospitals and health-care systems saw their profits decline 63 percent in 1999, according to a report by credit rating service Fitch Inc., Bloomberg News reported August 4.
The decline in performance reflects pressures on hospital operations, including reduced payments from government and managed health-care plans. The drop in profits prompted widespread bond rating downgrades by Fitch and other rating companies.
“Fitch anticipates more of the same for 2000,” Richard Szalkowski, an associate director of Fitch, said in a statement. By most measurements of financial health, he said, hospitals will get weaker as cost and reimbursement problems continue.
Hospitals must tighten their belts in response, according to the report, by cutting expenses, consolidating services and getting out of unprofitable lines of business.
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