By Weidner, David
American Banker , Vol. 164, No. 183
Just when it seemed things couldn't get worse for health-care companies, middle-market lenders have rated the industry the least appealing place to put their money.
More than two-thirds of lenders, 69%, named health care their last choice for lending, according to a survey to be released today by Phoenix Management Services Inc., a consulting firm in Philadelphia. That's up from 55% of lenders who named the industry "least attractive" during the second quarter.
"The sickest patient in the health care system may be the industry itself," said E. Talbot Briddell, president of Phoenix Management. "With declining reimbursements, the turmoil of managed care, and increasing discontent among physicians, lenders seem to be saying 'Industry, heal thyself.'"
The findings aren't likely to come as a surprise. A rash of health-care defaults has plagued banks during the last year. Hardest hit have been creditors to long-term health-care providers, which were already heavily in debt when a new Medicare payment system slashed revenues to those companies as much as 50%.
The quarterly Phoenix survey polled 94 institutions by mail during late July and early August. …