CHICAGO -- Analysts at Moody's Investors Service see no quick rebound for faltering health care debt as downgraded hospital ratings dramatically outpaced upgrades for the second quarter in a row this year.

Moody's downgraded 11 tax-exempt hospital revenue bond ratings in the third quarter of 1994, but the agency upgraded only three such bond ratings in the same period. A total of $667.4 million of debt received lower ratings and $258.8 million of debt got higher marks.

Moody's analysts attributed the two-quarter slump to "increased reimbursement and competitive pressures in the health care sector" and predicted those conditions would continue into 1995.

"Nationally, we're seeing ongoing managed-care pricing pressure affecting utilization trends and financial performance," said Christine Ballantyne, a vice president at Moody's.

She predicted that managed-care programs will continue to sweep the country. Though some managed-care programs have reached what she calls "maturity" in markets like California and Minneapolis-St. Paul, most are just starting to gird for the pricing pressure it will bring.

"In some markets, managed care is just starting to get competitive. In some markets it's barely started. It's an evolutionary thing where it will be felt region by region," said Ballantyne. For instance, managed care has penetrated 35% of the market in Massachusetts, but only 5% in South Carolina.

In part because of its high concentration of managed-care programs, the third-quarter spotlight cast a shadow on Massachusetts hospitals. Four of the state's hospitals, holding a total of $386 million of debt, have been downgraded as part of an ongoing statewide review by the rating agency. None have been upgraded so far.

But Massachusetts health care experts downplay the ratings. "I don't know that a couple of downgradings is real significant," said Julie Fay, director of marketing for the Massachusetts Health and Educational Facility Authority. "It's an industry trend, and you're likely to see some changes when they review all the institutions in one state at the same time."

The review process was particularly painful for Boston's Brigham & Women's Hospital. Brigham's $256 million of debt was downgraded to A1 from Aa last quarter.

"When you factor in that Brigham had an operating loss of $2.5 million last year and was forecasting an operating loss for fiscal 1994, it did not fall within the traditional parameters or statistical distribution for all other Aa hospitals across the country," said Joseph J. Trainor, deputy treasurer for Partners HealthCare System Inc.

After looking at the numbers, officials at Brigham decided to link up with Massachusetts General. The two now have common governance, and Partners is the sole voting member on the boards of both hospitals.

"Thanks to the merger, we're able to look at some of the basic banking and custodial arrangements we had, and we'll be able to save $1.5 million a year simply by reengineering and looking at what we can do with pricing leverage," Trainor said.

Ballantyne says others will follow in Brigham's footsteps. "There is ongoing consolidation, and the merged entities could very well end up being stronger," she said.

But she says Moody;s is not predicting a change in the ratio of downgrades to upgrades among tax-exempt hospital revenue bonds in the near future.

Moody's downgraded the ratings for:

* Bedford Medical Center in Bedford, Ind., to Ba from A.

* Brigham & Women's Hospital in Boston to A1 from An.

* Cape Coral Medical Center in Cape Coral, Fla, to B1 from Ban.

* Carthage Area Hospital in Carthage, N.Y., to Caa from B.

* Cornwall Hospital in Cornwall, N.Y., to B1 from Bs.

* Fort Hamilton-Hughes Memorial Hospital in Hamilton, Ohio, to Baa from Baal.

* Georgia Baptist Health Care System in Atlanta to Baal from A.

* Magnolia Hospital in Corinth, Miss., to Ba from Baa.

* Massachusetts Eye & Ear Infirmary in Boston to Baa from Baal.

* New England Memorial Hospital in Stoneham, Mass., to Ba from Baa.

* Norwood Hospital in Norwood, Mass., to Ba from Baa. Moody's upgraded the ratings for:

* McLaren Regional Medical Center in Flint, Mich., to A1 from A.

* Northwest Georgia Health System in Austell, Ga., to Aa from A1 and to Aa from A.

* Texas Children's Hospital in Houston to Aa/VMIG 1 from A1.

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