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12 health systems with strong finances

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https://www.beckershospitalreview.com/finance/12-health-systems-with-strong-finances-031219.html

 

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.

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. 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.

3. 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.

4. Chicago-based Northwestern Memorial HealthCarehas an “Aa2” rating and stable outlook with Moody’s. Moody’s expects that the health system’s operating model and comprehensive IT systems will enable it to execute growth strategies while maintaining strong margins.

5. Winston-Salem, N.C.-based Novant Health has an “Aa3” rating and stable outlook with Moody’s. The credit rating agency expects Novant to continue generating strong cash flow margins in favorable markets.

6. Boston-based Partners HealthCare has an “Aa3” rating and stable outlook with Moody’s and an “AA-” rating and stable outlook with S&P. The health system has an excellent reputation in the clinical and research spaces, a long track record of fundraising, and adequate balance sheet measures, according to Moody’s.

7. 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.

8. 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.

9. 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.

10. Iowa City-based University of Iowa Hospitals & Clinics has an “Aa2” rating and stable outlook with Moody’s. The system’s strong brand and position as the only academic medical center in Iowa will continue to translate into strong market share and high patient demand, according to Moody’s.

11. York, Pa.-based WellSpan Health has an “AA-” rating and stable outlook with Fitch. The health system has a leading market position in south-central Pennsylvania and a strong financial profile, according to Fitch.

12. Yale New Haven (Conn.) Health has an “Aa3” rating and stable outlook with Moody’s. The health system has a leading market position in Connecticut, with a broad reach for tertiary and quaternary patients from throughout the state, and strong brand recognition, according to Moody’s.

 

 

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

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https://www.beckershospitalreview.com/finance/it-remains-to-be-seen-whether-acute-care-nonprofit-hospital-profitability-has-peaked-fitch-says.html?origin=cfoe&utm_source=cfoe

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.