7 health systems with strong finances

https://www.beckershospitalreview.com/finance/7-health-systems-with-strong-finances-090919.html?oly_enc_id=2893H2397267F7G

Here are seven health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service, Fitch Ratings and S&P Global Ratings.

Note: This is not an exhaustive list. Hospital and health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. St. Louis-based BJC Health System has an “Aa2” rating and stable outlook with Moody’s. The health system has good margins and a favorable market position, according to Moody’s.

2. Hollywood, Fla.-based Memorial Healthcare System has an “Aa3” rating and stable outlook with Moody’s. The health system has a dominant market position in the southern portion of South Broward County and above average balance sheet liquidity, according to Moody’s.

3. Broomfield, Colo.-based SCL Health has an “Aa3” rating and stable outlook with Moody’s and an “AA-” rating and stable outlook with S&P. The health system has strong operating performance and solid balance sheet measures, according to Moody’s. The credit rating agency expects the health system’s cash flow to continue to grow.

4. Seattle Children’s Healthcare System has an “Aa2” rating and stable outlook with Moody’s. The health system has consistently strong operating performance, solid liquidity measures, and a favorable reputation within a broad service area, according to Moody’s.

5 Norfolk, Va.-based Sentara Healthcare has an “Aa2” rating and stable outlook with Moody’s. The health system has a leading market position in its service area, robust balance sheet metrics and solid margins, according to Moody’s.

6. St. Louis-based SSM Health has an “AA-” rating and stable outlook with Fitch. The health system has a strong financial profile and a growing health plan, according to Fitch. The credit rating agency expects SSM to continue to grow unrestricted liquidity and sustain improved operating performance.

7. Arlington-based Texas Health Resources has an “Aa2” rating and stable outlook with Moody’s. The health system has solid financial performance, a leading market position, good coverage of moderate debt levels, and a strong cash position, according to Moody’s.

 

A Wave of Layoffs Loom for Wall Street

https://www.crainsnewyork.com/markets/wave-layoffs-looms-wall-street?utm_source=breaking-news&utm_medium=email&utm_campaign=20190909&utm_content=hero-readmore

 

 

 

Comeback or blip? Nonprofit hospital margins show gains in 2018

https://www.healthcaredive.com/news/comeback-or-blip-nonprofit-hospital-margins-show-gains-in-2018/562131/

Dive Brief:

  • Nonprofit hospitals’ operating margins are improving after falling for the last two years, according to an annual report on hospital performance from Fitch Ratings.
  • Smaller hospitals are driving the turnaround and it’s a notable trend because they’re not able to command higher rates from payers like their peers the “must-have” hospitals, according to the report.
  • “The fact that [smaller hospitals] saw meaningful improvement is a good indicator that operational strength is returning to the sector, though the highs we saw in 2015 may be an unattainable highwater mark,” Kevin Holloran, senior director for Fitch, said in a statement.

Dive Insight:

The industry continues to experience pressures including slowing inpatient admissions and more patients covered by government-sponsored health insurance such as Medicare, which typically reimburses at a lower rate compared to commercial insurers.

Wages are also under pressure amid a tight labor market, and the need to shift to an environment that is increasingly reimbursing for quality — not quantity.

The question now is whether these recent gains are a “temporary blip” or a major shift, Fitch analysts noted.

“Not-for-profit hospitals are by no means out of the woods yet with sector pressures likely to continue, but there appears to be light at the end of the tunnel in terms of longer-term stability,” Holloran said.

Still, despite the margin improvement, Fitch maintains a negative outlook for the sector.

Even still, “the not-for-profit healthcare sector has shown considerable resiliency over the years, weathering events like the 2008/2009 great recession, sequestration cuts to governmental funding, and a shifting payor mix,” Fitch analysts said.

Fitch believes consolidation among providers will continue. Providers will focus on increasing their size and scale to maintain leverage over insurance companies and allow them to invest in population health.

 

Cleveland Clinic more than quadruples operating income

https://www.beckershospitalreview.com/finance/cleveland-clinic-more-than-quadruples-operating-income.html

Cleveland Clinic’s revenues and operating income increased year over year in the second quarter of 2019, according to unaudited financial documents.

Cleveland Clinic’s revenues climbed to $2.7 billion in the second quarter of this year, up 20 percent from $2.2 billion in the same period of 2018. The boost was largely attributable to higher net patient service revenue, which increased 20.5 percent year over year.

The system’s operating expenses were up 16 percent year over year in the second quarter of 2019. Expenses grew across all categories, including supplies, administrative services, and salaries, benefits and wages.

Cleveland Clinic ended the second quarter of 2019 with operating income of $116.2 million, up from $25.1 million in the second quarter of last year. The system’s operating margin was 4.4 percent in the second quarter of this year, compared to an operating margin of 1.1 percent in the same period of 2018.

During the second quarter of this year, Cleveland Clinic’s nonoperating gains totaled $110.3 million. That’s compared to the second quarter of 2018, when the system reported nonoperating gains of $55.6 million. The system said the increase was primarily attributable favorable changes in the financial markets.

Cleveland Clinic ended the second quarter of 2019 with net income of $226.5 million, up from $80.7 million in the same period a year earlier.

 

Advocate Aurora Health’s net income more than doubles in Q2

https://www.beckershospitalreview.com/finance/advocate-aurora-health-s-net-income-more-than-doubles-in-q2.html

Image result for advocate aurora health headquarters

Outpatient volume growth helped push Advocate Aurora Health’s revenue higher in the second quarter of 2019, according to unaudited financial documents released Aug. 22.

Advocate Aurora Health, which was formed in April 2018 and has dual headquarters in Downers Grove, Ill., and Milwaukee, reported revenue of $3.2 billion in the second quarter of 2019, up from $3 billion in the same period a year earlier. Patient service revenue climbed 8.8 percent year over year partially due to increased outpatient volume. The health system said capitation revenue dropped 9.9 percent year over year due to the conversion of a full-risk arrangement to fee-for-service.

After factoring in a 4.7 percent year-over-year increase in expenses, Advocate Aurora posted operating income of $132.3 million in the second quarter of 2019. That’s up from $107.2 million in the same period a year earlier.

The 28-hospital system reported nonoperating income of $286 million in the second quarter of this year, which includes investment income of $194.4 million. Advocate Aurora ended the second quarter of 2019 with net income of $418.4 million, up from $158.7 million a year earlier.

 

 

 

Sentara sees net income climb 81% in first half of 2019

https://www.beckershospitalreview.com/finance/sentara-sees-net-income-climb-81-in-first-half-of-2019.html

Image result for sentara healthcare headquarters

Norfolk, Va.-based Sentara Healthcare improved its operating revenues and net income in the first half of fiscal year 2019, according to unaudited financial documents

Sentara recorded total operating revenues of $3.3 billion in the six-month period ended June 30, up 6.7 percent from $3.1 billion reported in the same period a year prior. The health system said the increase was primarily driven by growth in net patient service revenue. Sentara’s expenses also increased year over year by 9.3 percent to $3.1 billion for the most recent six-month period.

Sentara’s health plan saw a $34.8 million decrease in premium and capitation revenue in the most recent six-month period, driven by a 46,000-member reduction in health maintenance organization individual enrollment. However, the decline was mostly offset by an increase in Medicaid and other membership of 48,000, thanks to the state’s recent Medicaid expansion.

Overall, Sentara saw its net operating income decline 19 percent year over year to $230.5 million, down from $284.8 million reported in the same period of fiscal 2018. After including nonoperating gains, Sentara ended the first half of the fiscal year with net income of $569.4 million, up 81.2 percent from $314.1 million recorded in the same period of the previous year.