Moody’s Ratings affirmed the “Aa3” rating and stable outlook for St. Louis-based Ascension, which operates 91 wholly owned or consolidated hospitals and more than 300 ambulatory surgery centers across 36 states.
Five things to know:
1. Moody’s said in its Oct. 1 report that the affirmation reflects Ascension’s leading market positions, favorable demographics in most markets and its ability to use scale to drive efficiencies.
2. Moody’s expects the Amsurg acquisition, which brought Ascension to 312 ambulatory surgery centers, to accelerate growth in profitable non-acute service lines and add to margins. Ascension completed the deal for Amsurg, valued at about $3.9 billion, in June.
3. Moody’s said Ascension’s leverage remains high compared with peers, with cash-to-adjusted debt likely to stay around 150% to 160%. The agency also said Ascension’s growth strategy will raise capital spending and limit gains in liquidity.
4. Moody’s expects near-term operational pressure from rising uncompensated care costs due to the expiration of enhanced ACA subsidies at the end of 2025 and declining Medicaid eligibility. The system will also face additional pressure beginning in 2028 due to its “heavy reliance” on Medicaid supplemental funding programs, Moody’s said. Competition in its largest markets adds further strain.
5. Ascension lowered its operating loss by $371 million in fiscal year 2026, which ended June 30. Ascension reported a $120 million loss from operations (-0.2% margin), compared with a $491 million loss (-1.6% margin) in fiscal 2025. Excluding the Amsurg-related bond interest and transaction costs, Ascension said its core operations generated $109 million in positive operating income for the year.
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