Nonprofit Hospitals Face Rising Costs and Shrinking Funds

A report issued Wednesday by investment rating agency Moody’s predicts that nonprofit hospitals will have to drastically reduce spending to survive as President Obama’s health-care law is implemented and Congress battles over budgets, says Reuters.

Changes in how Medicare will pay for procedures are key to the challenges facing hospitals, Moody’s said in report titled “Doing More With Less.”

“As the era of reform and tightened federal funding unfolds, not-for-profit hospitals face an imperative to deliver higher-quality service with lower reimbursement rates per unit of service,” the report said.

Taking a more pessimistic view of the sector’s fiscal health than rival rating agency Standard & Poor’s, Moody’s expects downgraded ratings to exceed upgrades for nonprofit medical centers this year.