"They're Getting Eaten Alive", Morgan Stanley Warns Of Momentum In Hospital Closings

While the stock market could indeed be in the most extended bull market in history, there are new, troubling signs that the real economy is faltering.

A new report has sounded the alarm about the pace of hospital closures across the country. It says there are several factors pressuring margins at hospitals that are contributing to the accelerating rate of closures, particularly in rural communities.

The American Hospital Association (AHA) conducts an annual survey of hospitals in the United States. The data shows hospitals have been closing at a rate of about 30 per annum.

Bloomberg spoke with Morgan Stanley analysts led by Vikram Malhotra, who examined data from roughly 6,000 US private and public hospitals and determined eight percent are at risk of closing; another 10 percent are considered extremely “weak.” Malhotra defined weak hospitals based on criteria for margins for earnings before interest and other items, occupancy and revenue. The “at risk” group was defined by capital expenditures and efficiency, among others.

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