8 health systems with strong finances

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Here are eight hospitals and health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service and Fitch 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. Dallas-based Baylor Scott & White Health has an “Aa3” rating and stable outlook with Moody’s. The health system has strong cash flow margins and its favorable demographics will contribute to volume and revenue growth, according to Moody’s.

2. Orange, Calif.-based Children’s Hospital of Orange County has an “AA-” rating and stable outlook with Fitch. The hospital has a strong financial profile, and Fitch expects its capital-related ratios to improve.

3. Newark, Del.-based Christiana Care has an “Aa2” rating and stable outlook with Moody’s. The health system has solid margins and a robust balance sheet, according to Moody’s.

4. Fort Worth, Texas-based Cook Children’s Medical Center has an “Aa2” rating and stable outlook with Moody’s. The hospital has a strong market position and solid operating performance, according to Moody’s.

5. Durham, N.C.-based Duke University Health System has an “Aa2” rating and stable outlook with Moody’s. The health system is a leading provider of tertiary and quaternary services and has solid margins and cash levels, according to Moody’s.

6. St. Louis-based SSM Health Care has an “AA-” rating and stable outlook with Fitch. SSM has a strong financial profile, and Fitch expects the system to continue growing unrestricted liquidity and to maintain improved operational performance.

7. Appleton, Wis.-based ThedaCare has an “AA-” rating and stable outlook with Fitch. The health system has a leading market share in a stable service area and strong operating performance, according to Fitch.

8. Cincinnati-based TriHealth has an “AA-” rating and stable outlook with Fitch. Fitch expects the health system to maintain good operating ratios leading to liquidity growth.

 

12 health systems with strong finances

https://www.beckershospitalreview.com/finance/12-health-systems-with-strong-finances-120618.html?origin=rcme&utm_source=rcme

Here are 12 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. Health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. St. Louis-based Ascension has an “Aa2” senior debt rating and stable outlook with Moody’s. The health system has a large diversified portfolio of sizable hospitals and strong liquidity. Moody’s expects Ascension’s margins to improve in fiscal year 2019.

2. Wausau, Wis.-based Aspirus has an “AA-” rating and stable outlook with S&P. The health system has solid debt and liquidity metrics, according to S&P.

3. Morristown, N.J.-based Atlantic Health System has an “Aa3” rating and stable outlook with Moody’s. The system has a strong market position, favorable balance sheet ratios and strong operating performance, according to Moody’s.

4. Charlotte, N.C.-based Atrium Health has an “AA-” rating and stable outlook with S&P. The health system has a strong operating profile, favorable payer mix, healthy financial performance and sustained volume growth, according to S&P.

5. Durham, N.C.-based Duke University Health System has an “Aa2” rating and stable outlook with Moody’s. The health system is a leading provider of tertiary and quaternary services and has solid margins and cash levels, according to Moody’s.

6. Inova Health System has an “Aa2” rating and stable outlook with Moody’s. The Falls Church, Va.-based health system has consistently strong cash-flow margins, a leading market position and a good investment position, according to Moody’s.

7. Baltimore-based Johns Hopkins Health System has an “Aa2” rating and stable outlook with Moody’s. The health system has favorable liquidity metrics, strong fundraising capabilities, a healthy market position and regional brand recognition, according to Moody’s.

8. St. Louis-based Mercy Health has an “Aa3” rating and stable outlook with Moody’s. The health system has favorable cash-flow metrics, a solid strategic growth plan, a broad service area and improving operating margins, according to Moody’s.

9. Traverse City, Mich.-based Munson Healthcare has an “AA-” rating and positive outlook with Fitch. The health system has a leading market share in a favorable demographic area and a healthy net leverage position, according to Fitch.

10. Vancouver, Wash.-based PeaceHealth has an “AA-” rating and stable outlook with Fitch. The health system has a leading market position, robust reserves and strong cash flow, according to Fitch.

11. St. Louis-based SSM Health Care has an “AA-” rating and stable outlook with Fitch. SSM has a strong financial profile, and Fitch expects the system to continue growing unrestricted liquidity and to maintain improved operational performance.

12. Appleton, Wis.-based ThedaCare has an “AA-” rating and stable outlook with Fitch. The health system has a leading market share in a stable service area and strong operating performance, according to Fitch.

 

 

14 recent hospital, health system outlook and credit rating actions

https://www.beckershospitalreview.com/finance/14-recent-hospital-health-system-outlook-and-credit-rating-actions.html?origin=cfoe&utm_source=cfoe

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The following hospital and health system credit rating and outlook changes or affirmations occurred in the last week, beginning with the most recent:

1. Fitch affirms ‘AA-‘ rating for SSM Health

Fitch Ratings affirmed St. Louis-based SSM Health’s “AA-” issuer default rating and “AA-“/”F1+” rating where applicable on outstanding rated bonds.

2. Moody’s affirms Cook Children’s Medical Center’s ‘Aa2’ rating

Moody’s Investors Service affirmed its “Aa2” and “Aa2/VMIG 1” ratings for Fort Worth, Texas-based Cook Children’s Medical Center, affecting $356 million of outstanding revenue bonds.

3. Moody’s affirms ‘Baa2’ rating for Children’s Hospital Los Angeles

Moody’s Investors Service affirmed its “Baa2” rating for Children’s Hospital of Los Angeles, affecting $438 million of rated debt.

4. Moody’s affirms ‘A1’ rating for Lucile Packard Children’s Hospital

Moody’s Investors Service affirmed its “A1” revenue bond rating for Palo Alto, Calif.-based Lucile Packard Children’s Hospital.

5. Moody’s affirms ‘A2’ rating for Mary Greeley Medical Center

Moody’s Investors Service affirmed its “A2” rating for Ames, Ia.-based Mary Greeley Medical Center, affecting $64 million of outstanding revenue bonds.

6. Moody’s downgrades Marion County Health and Hospital to ‘Aa2’

Moody’s Investors Service downgraded Marion County (Ind.) Health and Hospital Corp.’s rating from “Aa1” to “Aa2.”

7. Moody’s assigns ‘A2’ rating to HonorHealth

Moody’s Investors Service assigned an “A2” rating to Scottsdale, Ariz.-based HonorHealth’s revenue bonds and affirmed its “A2” rating for the system’s outstanding parity debt.

8. Moody’s upgrades Gainesville Hospital District rating to ‘Ba1’

Moody’s Investors Service upgraded Gainesville (Texas) Hospital District issuer and general obligation limited tax debt ratings from “Ba2” to “Ba1.”

9. Moody’s downgrades Monroe County Health Care Authority rating to ‘Ba1’

Moody’s Investors Service downgraded Monroe County (Ala.) Health Care Authority’s rating from “A3” to “Ba1,” affecting $3.6 million in general obligation limited tax bonds.

10. Moody’s affirms ‘A2’ rating for MedStar Health

Moody’s Investors Service affirmed its “A2” rating on Columbia, Md.-based MedStar Health, affecting $1.4 billion of debt.

11. Moody’s assigns ‘A2’ rating to Mercy Health

Moody’s Investors Service assigned an “A2” rating to Cincinnati-based Mercy Health’s proposed taxable bond and also affirmed its “A2” and “A2/VMIG 1” ratings on the system’s outstanding bonds.

12. S&P revises Spartanburg Regional Health’s outlook to negative

S&P Global Ratings revised its outlook for Spartanburg (S.C.) Regional Healthcare System from stable to negative.

13. S&P affirms ‘A+’ rating for Rush University Medical Center

S&P Global Ratings affirmed its “A+” long-term rating for Chicago-based Rush University Medical Center’s outstanding revenue bonds.

14. S&P raises rating for Columbus Regional Healthcare to ‘A+’

S&P Global Ratings raised its rating for Whiteville, N.C.-based Columbus Regional Healthcare System from “BBB-” to “A+.”

 

 

 

‘It remains to be seen’ whether acute care, nonprofit hospital profitability has peaked, Fitch says

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Fitch Ratings has released a new report in response to questions from U.S. investors about whether acute care, nonprofit hospitals’ operating profitability has peaked or can be improved.

Four takeaways:

1. Fitch said acute care, nonprofit hospitals experienced across-the-board deterioration of operating margins in 2017, and the trend is expected to repeat this year. But acute care, nonprofit hospitals’ balance sheet metrics, such as days cash on hand, cash to debt and debt to capitalization, are at an all-time high.

2. Amid declining operating margins, large system providers plan to reduce costs and inefficiencies and are rethinking care delivery, according to Fitch Senior Director Kevin Holloran. He said smaller providers face greater challenges because they “are characteristically less able to trim expenses and typically unable to negotiate higher rates from commercial insurers in their markets.”

3. Fitch concluded: “It remains to be seen whether we are at a peak or if there is further room to improve.”

4. However, the ratings agency is certain of one thing: Nonprofit hospital systems will continue to consolidate. Fitch said investors have asked it whether increased size and scale through consolidation is advantageous as far as credit ratings.

“Size and scale are ‘better’ for a hospital’s rating if its enhanced size and scale means improved operations, stronger balance sheets and more market essentiality,” said Mr. Holloran.”Conversely, a hospital getting bigger just for the sake of getting bigger at times can lead to an initial dip in operating profitability as the two or more organizations come together.”

Access the full report here.

 

9 hospitals with strong finances

https://www.beckershospitalreview.com/finance/9-hospitals-with-strong-finances-110818.html

Here are nine hospitals and 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.

1. Wausau, Wis.-based Aspirus has an “AA-” rating and stable outlook with S&P. The health system has solid debt and liquidity metrics, according to S&P.

2. Charlotte, N.C.-based Atrium Health has an “AA-” rating and stable outlook with S&P. The health system has a strong operating profile, favorable payer mix, healthy financial performance and sustained volume growth, according to S&P.

3. St. Louis-based Mercy Health has an “Aa3” rating and stable outlook with Moody’s. The health system has favorable cash flow metrics, a solid strategic growth plan, a broad service area and improving operating margins, according to Moody’s.

4. Traverse City, Mich.-based Munson Healthcare has an “AA-” rating and positive outlook with Fitch. The health system has a leading market share in a favorable demographic area and a healthy net leverage position, according to Fitch.

5. Parkview Regional Medical Center in Fort Wayne, Ind., has an “AA-” rating and stable outlook with S&P. The hospital is executing on its strategic plan, and S&P expects it to maintain its balance sheet metrics.

6. Vancouver, Wash.-based PeaceHealth has an “AA-” rating and stable outlook with Fitch. The health system has a leading market position, robust reserves and strong cash flow, according to Fitch.

7. Baltimore-based Johns Hopkins Health System has an “Aa2” rating and stable outlook with Moody’s. The health system has favorable liquidity metrics, strong fundraising capabilities, a healthy market position and regional brand recognition, according to Moody’s.

8. Madison-based University of Wisconsin Hospital and Clinics has an “Aa3” rating and stable outlook with Moody’s. The hospital has an integral relationship with the University of Wisconsin-Madison and is a major academic medical center and quaternary referral center for the region and state, according to Moody’s.

9. Willis-Knighton Medical Center in Shreveport, La., has an “AA-” rating and positive outlook with Fitch. The hospital has a leading inpatient market share, favorable payer mix and healthy operating margins, according to Fitch.

 

15 health systems with strong finances

https://www.beckershospitalreview.com/finance/15-health-systems-with-strong-finances-100418.html

Here are 15 health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service and Fitch Ratings.

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

1. St. Louis-based Ascension has an “Aa2” senior debt rating and stable outlook with Moody’s. The health system has a large diversified portfolio of sizable hospitals and strong liquidity. Moody’s expects Ascension’s margins to improve in fiscal year 2019.

2. Morristown, N.J.-based Atlantic Health System has an “Aa3” rating and stable outlook with Moody’s. The system has a strong market position, favorable balance sheet ratios and strong operating performance, according to Moody’s.

3. Atrium Health has an “Aa3” rating and stable outlook with Moody’s. The Charlotte, N.C.-based health system has historically stable operating performance and solid cash-flow metrics, according to Moody’s.

4. Prince Frederick, Md.-based Calvert Health System has an “AA-” rating and stable outlook with Fitch. The system has a leading market share, a favorable payer mix and stable cash flow, according to Fitch.

5. Children’s Healthcare of Atlanta has an “Aa2” rating and stable outlook with Moody’s. The health system has a dominant market position, strong margins and ample liquidity, according to Moody’s.

6. Cleveland Clinic has an “Aa2” rating and stable outlook with Moody’s. Cleveland Clinic has strong brand recognition, exceptional fundraising ability and healthy cash flow, according to Moody’s.

7. Inova Health System has an “Aa2” rating and stable outlook with Moody’s. The Falls Church, Va.-based health system has consistently strong cash-flow margins, a leading market position and a good investment position, according to Moody’s.

8. Philadelphia-based Main Line Health has an “Aa3” rating and stable outlook with Moody’s. The system has a strong market position, healthy balance sheet metrics and a light debt burden, according to Moody’s.

9. Rochester, Minn.-based Mayo Clinic has an “Aa2” rating and stable outlook with Moody’s. Mayo has a strong clinical reputation, favorable fundraising capabilities and a robust balance sheet, according to Moody’s.

10. Dallas-based Methodist Health System has an “Aa3” rating and stable outlook with Moody’s. The health system has a favorable liquidity position, consistent operating results and a growing market population, according to Moody’s.

11. Omaha-based Nebraska Medicine has an “AA-” rating and stable outlook with Fitch. The system has strong operating margins and a light debt burden, according to Fitch.

12. Fort Wayne, Ind.-based Parkview Health System has an “Aa3” rating and stable outlook with Moody’s. The system has healthy debt service coverage, manageable capital spending and improving liquidity metrics, according to Moody’s.

13. Sisters of Charity of Leavenworth (Kan.) Health System, which does business as SCL Health, has an “Aa3” rating and stable outlook with Moody’s. The system has a good market position in a favorable service area, strong operating margins and limited capital spending, according to Moody’s.

14. Hollywood, Fla.-based South Broward Hospital District has an “Aa3” rating and positive outlook with Moody’s. The health system has a dominant market position, robust debt coverage and improving operating margins, according to Moody’s.

15. Chapel Hill-based University of North Carolina Hospitals has an “Aa3” rating and stable outlook with Moody’s. The health system has an excellent market position, strong patient demand and healthy financial performance, according to Moody’s.

 

 

 

Fitch: Nonprofit hospital balance sheet metrics improve, operating margins don’t

https://www.beckershospitalreview.com/finance/fitch-nonprofit-hospital-balance-sheet-metrics-improve-operating-margins-don-t.html

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U.S. nonprofit hospitals continue to struggle with operating margins, but key balance sheet metrics have improved, according to Fitch Ratings.

Fitch’s 2018 hospital median report, based on audited 2017 data, shows operating margins declined for the second consecutive year in every rating category. The 2017 median operating margin was 1.9 percent compared to 2.8 percent in 2016.

But the agency said key balance sheet metrics, such as days cash on hand, cash to debt and leverage, got better and are at all-time highs. For example, the median days cash on hand climbed from 195.5 in 2016 to 213.9 in 2017, and cash to debt increased to 159 percent from 142.8 percent year over year.
“Despite this apparent contradiction — which may be temporary in nature — the clear signal through the noise is that operating margins remain under pressure for the second year in a row, indicating ongoing stress in the sector,” Fitch said.

The agency said the ongoing operating margin struggles are attributable to salary and wage expense pressures, increasing pharmaceutical costs, and the shift from fee-for-service to value-based care.

Fitch finalized rating criteria changes for nonprofit hospitals revenue debt in January, which focus more on balance sheet strength compared to operating profitability. Even with declining operating margins, Fitch said its median rating for nonprofit hospitals remains ‘A.”

But “should operational pressures continue for an extended period of time, even strong balance sheets will begin to come under pressure,” said Fitch Senior Director Kevin Holloran.