Terrorist attacks costly for providers - Industry Scan - hospital economics will be adversely affected by September 11 - Brief Article

Healthcare Financial Management, Dec, 2001

The tragic events of September 11, 2001, will negatively affect hospitals and health systems primarily in the area of nonoperating revenue, resulting in reduced debt-service coverage and liquidity levels, according to Fitch IBCA, New York, New York. The decline in the stock market has drastically reduced nonoperating revenue, which wilt lower the bottom-line profitability and debt-service coverage of most hospitals.

In addition, the passage of more Federal legislation for relief funds is doubtful, and the call-up of nurses and medical technicians to the military reserves may further affect already thinning staffing levels. For the foreseeable future, the only attention hospitals will get from the Federal government will be in the form of programs and funding for preparing for a possible biological threat, according to Fitch.