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Nonprofit hospitals in COVID-19 hot spots may suffer from credit rating downgrades as the latest wave of infections hits their financial margins, according to a new report from Fitch.

Small hospitals could be the most hard-hit.

More details from Fierce Healthcare:

Much like the industry saw in 2020, these hospitals facing an influx of COVID-19 patients will need to increase spending on supplies and staffing. The latter of these is a particular pain point, as hospitals and skilled nursing facilities alike are contending with a lasting shortage of nurses “expected to continue into 2022, and likely much longer,” Fitch wrote.

At the same time, COVID-19 cases are upending the expected return of elective procedures that could potentially boost these hospitals’ margins, the group wrote.

Postponement of nonemergent cases is not just coming from worried patients but from hospitals that are fielding a large number of COVID-19-positive patients in their facilities. Making matters worse, the nonprofits won’t be seeing additional federal stimulus checks nor other support that helped buoy their operations during 2021, Fitch wrote.

The group said smaller, lower-rated hospitals will be less capable of fending off the rising expenses and declining reimbursement that comes with ICUs full of labor-intensive COVID-19 patients.

Highly rated hospitals, on the other hand, “should have sufficient financial cushion to absorb an increase in operating costs and a shift in volume type without meaningfully affecting credit,” Fitch wrote.