8 Hospitals Receive Credit Downgrades in Past Month

Eight hospitals and health systems received a credit downgrade between Feb. 15 and March 14, according to a report by HFA Partners.

The hospitals and health systems receiving credit downgrades included:

•    Arnot Ogden Medical Center (Elmira, N.Y.) — from Baa1 to Baa3 (Moody's)
•    Davis Health System (Elkins, W.Va.) — from B2 to Caa3 (Moody's)
•    King's Daughters Medical Center (Ashland, Ky.) — from A+ to A (Fitch)
•    Palomar Health (Escondido, Calif.) — from Baa3 to Ba1 (Moody's)
•    PeaceHealth (Vancouver, Wash.) — from A+ to A (S&P)
•    St. Joseph Health Services (North Providence, R.I.) — from Caa2 to Caa3 (Moody's)
•    Summit Healthcare Regional Medical Center (Show Low, Ariz.) — from BBB+ to BBB (S&P)
•    UMass Memorial Health Care (Worcester, Mass.) — from Baa1 to Ba1 (Moody's)

Two of the systems that received downgrades — Davis Health System and St. Joseph — are in precarious financial positions. Moody's said at the end of calendar year 2013, Davis Health System had only 28 days cash on hand and an operating margin of -3.9 percent. St. Joseph had 15 days cash on hand and a -13.7 percent operating margin in the first quarter of its 2014 fiscal year.

For PeaceHealth, a nine-hospital Catholic network, this is the second straight month it has received a credit downgrade. Fitch lowered the system's credit rating from AA- to A+ last month.

Four acute-care hospitals and health systems garnered a credit upgrade in the past month:

•    Geisinger-Lewistown (Pa.) Hospital — from BBB- to AA (S&P) and from Ba1 to Aa2 (Moody's)
•    Northfield (Minn.) Hospital & Clinics — from BBB- to BBB (S&P)
•    Poudre Valley Health System (Fort Collins, Colo.) — from A+ to AA- (Fitch)
•    Rex Healthcare (Raleigh, N.C.) — from A+ to AA- (S&P)

Four hospitals and health systems also had positive outlook changes, while eight hospitals and health systems had negative outlook changes.

Related Articles on Hospital Credit Ratings:
Fitch: ICD-10 Could Hurt Nonprofit Hospitals' Credit Ratings
Moody's: 6 Hospitals With Credit Challenges Related to EHRs
Fitch: 11 Hospitals With Strong Finances

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