For-Profit Hospitals Poised for Stronger 2015 Than Not-For-Profits

Cost cutting and new initiatives aimed at bringing in more patients will lead to another strong year in 2015 for for-profit hospitals. Meanwhile, their not-for-profit counterparts have been given negative outlooks by credit-rating agencies.

Cost cutting and new initiatives aimed at bringing in more patients will lead to another strong year in 2015 for for-profit hospitals. Meanwhile, their not-for-profit counterparts are not expected to keep up. In 2014, investor-owned hospitals opted to invest in adjacent sectors, like technology, and refinance instead of pursuing blockbuster mergers, a trend that is expected to continue this year.

Fitch Ratings has found that companies like HCA and LifePoint Hospitals have benefited from increased patient volume under the Affordable Care Act. In contrast, the credit-rating agency has placed a negative outlook on not-for-profit hospitals.

For-profit providers also saw higher volumes in 2014 with same-hospital admission growth averaging 3.5% in the third quarter of 2014 when adjusted for outpatient activity, and their patient load is expected to continue to grow this year.

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