Buffalo, N.Y.-based Catholic Health has received a Moody's Investors Service upgrade following a string of downgrades over the last two years, Buffalo Business First reported Dec. 1.
Upgraded from a "Caa2" to a "Caa1," Moody's assigned the health system a stable outlook that reflects a risk of payment default reduction due to recurring operating improvements, like the opening of the system's new Lockport Memorial Hospital, state and federal grants that will help slow liquidity declines, and the chance of year-end covenant compliance.
The $1.2 billion health system saw operating losses of $175 million in 2022, $110 million behind plan. While the system has shown improvements, they also expect a 2023 deficit. Additionally, $1.15 billion system revenue was seen through Oct. 31, with a $40.4 million deficit year to date, down from the budgeted $86 million. In the first 10 months of 2022, $156.8 million was lost, according to the publication's report.
Due to ongoing labor shortages and inpatient volumes lagging behind pre-pandemic levels, Moody's cautioned that it could take the health system years to attain cashflow levels to address debt service and routine capital.
"While we are pleased with our performance in 2023, we know our work to create a more sustainable health care delivery system will take several years given continued national workforce shortages and inflationary headwinds impacting health care providers everywhere," Dave Macholz, CFO of Catholic Health, told the publication.