...Risk Profile Above Average: Among U.S. corporate issuers, for-profit acute care hospital companies have higher-than-average operating risk, due to a complex regulatory environment that influences the funding and structure of government healthcare programs. Reflecting this inherently challenging and dynamic environment, ratings span the `CCC' to `BB' rating categories. How ever, strong company-specific traits can result in higher ratings. Factors, such as operating scale, geographic diversification, advantageous patient/payor mix, and a constructive outlook for Medicare and Medicaid payment policies in primary service lines, w hich are favorably reflected in profitability and financial flexibility, can benefit ratings. Com plex Regulatory Environm ent: The hospital industry is highly regulated and federal and state government policy decisions are made in a politicized arena, making for an often unpredictable environment. This complicated factor represents the biggest risk to the industry's...
