Cleveland-based MetroHealth’s rating was downgraded to “Baa3” from “Baa2” by Moody’s.
The health system maintains a negative outlook at its new rating, Moody’s said in an Oct. 30 report.
Moody’s said the downgrade is driven by the system’s slower-than-expected pace of operating improvement, which has led to a decline in liquidity. The negative outlook reflects the possibility that liquidity will decline further and “underscores challenges in improving performance amid financial leadership turnover.”
MetroHealth on Oct. 30 launched a community-wide push to expand insurance enrollment as part of a broader effort to reduce the $1 million it spends daily on charity care. The safety-net system said its charity care costs have more than doubled since 2022 and reached “unsustainable” levels.
The campaign focuses on helping uninsured residents enroll in Medicare, Medicaid and marketplace plans through HealthCare.gov. Open enrollment begins Nov. 1, with coverage for those who sign up by Dec. 15 starting Jan. 1, 2026.
In July, MetroHealth laid off 125 employees — primarily in administrative positions — as part of a broader stabilization effort.
Moody’s said MetroHealth has strong patient demand and will continue to benefit from several growing sources of Medicaid supplemental funding and its retail pharmacy business. The system, however, will be challenged by high exposure to governmental payers (66% of gross revenue) amid federal Medicaid cuts and competition for labor.
