Fitch: U.S. Nonprofit Health Care Industry Stable in 2006.

NEW YORK -- The continued implementation of management best practices and a relatively stable revenue environment will offset pressures related to rising expenses, competition with physicians, and inadequate Medicaid reimbursement, according to Fitch Ratings. In a newly released special report,

Fitch said its Outlook for 2006 in the nonprofit hospital and health care system sector is stable; however, due to potential declines in Medicare reimbursement, a downward shift in growth rates on payor contracts and growing capital needs in the sector, Fitch remains skeptical about the sustainability of the current trends beyond 2006.

The report notes opportunities related to best practices in revenue cycle management, supply chain management, joint ventures, strategic capital allocation, and asset liability management will continue to play a pivotal role in improving financial performance. Additionally, increased scrutiny of tax-exempt status for hospitals, along with the possible future legislation that mirrors the applicable areas of the Sarbanes-Oxley Act of 2002 for publicly-traded companies, presents opportunities to improve accountability, transparency, and the integrity of financial reporting.

Fitch will hold a teleconference to discuss the new report '2006 Nonprofit Hospitals and Health Care Systems Outlook' on Thursday, Jan. 19, 2006 at 2 p.m. EST. Domestic participants should call +1-888-266-4139 five minutes prior to the 2 p.m. start time and reference conference ID No. 3746178. A PowerPoint slide deck will also be available on the day of the call at www.fitchratings.com under the heading 'Resource Library', 'Teleconference & Online Events'.

Fitch's full report is available at www.fitchratings.com under 'U.S. Public Finance' and 'Special Reports'.

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