Healthcare In Crisis: Fitch: Negative outlook for health care

Wednesday, December 17, 2008

Fitch: Negative outlook for health care

Hospitals and other health care industries will have a very difficult operating environment in 2009, Fitch Ratings predicts.

Weaker demand will be associated with the global economic recession and a U.S. governmental focus on reducing the consumer burden of health care spending, the company reports in its 2009 outlook for the healthcare sector.

U.S. health care demand remains strong because of an aging population, but Fitch expects a weakening economy will cause some consumers to delay or forego spending on prescriptions and procedures due to rising unemployment levels and declining wealth.

It is also likely growing numbers of uninsured or underinsured will result in an increase in bad debt and uncompensated care for the industry.

In the U.S., regulatory and legislative pressure on the healthcare industry will grow as the government increases its focus on controlling health care costs. Fitch expects the government will encourage policy that has it take a more active roll in negotiating pricing and making low cost generic alternatives available to consumers.

Liquidity for the industry as a whole remains stable, but Fitch said there are companies within the sector with weaker liquidity and financial flexibility.

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Statistics Collection

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