3 health systems hit with credit, outlook downgrades

Relatively few health systems experienced downgrades to their financial ratings since a Becker's roundup Dec. 22.

Operating concerns and a bleak financial outlook for some resulted in the following changes:

Asante Health (Medford, Ore.): While it affirmed a rating of "A+" on debt levels for Asante Health, Fitch Ratings downgraded the outlook for the health system to negative from stable.

The system, which provides care to nearly 600,000 people in Southern Oregon and Northern California, is experiencing operating pressures at the same time as building various projects as part of a $1 billion capital investment plan. Asante, as a result, has "limited flexibility" to manage any potential volatility in its operations or construction-related issues, Fitch said.

City of Hope (Duarte, Calif.): S&P Global Ratings downgraded the system Dec. 23 from "A+" to "A" as it struggles with declining operating performance and increased debt linked to its acquisition of Cancer Treatment Centers of America.

The rating refers both to City of Hope's outstanding debt and to $600 million of bonds it holds. The overall outlook is negative.

Doylestown (Pa.) Health: S&P Global Ratings downgraded the system's credit score from "BB" to "CCC" Dec. 27 amid concern it will not be able to meet various debt obligations and covenants, including a requisite number of days of cash on hand.

The downgrade also reflected what S&P called the group's "steep decline in operating performance" amid elevated labor costs and a high cash burn rate.

Doylestown, which operates Doylestown Hospital and several other clinics and urgent care facilities from its base about 40 miles north of Philadelphia, said it is undergoing a strategic review as it faces "extraordinary and unprecedented financial hardship."

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