Fountain Valley, Calif.-based MemorialCare’s credit rating was downgraded to “A+” from “AA-” by Fitch.
The downgrade reflects MemorialCare’s weak operating performance over the past several years, Fitch said in its May 1 report. In fiscal 2025, which ended June 30, the system reported an operating loss of nearly $170 million, compared to an operating loss of $75.6 million in fiscal 2024.
Fitch said the system’s weakened performance in 2025 was due to several items, some of which are considered one-time in nature, including a large medical malpractice reserve, severance expenses, nursing strike costs, and a negative average length of stay variance.
MemorialCare’s operations have seen improvement through the first half of fiscal 2026, according to the report. The system reported an operating loss of $44.1 million, slightly below budget expectations.
The system’s management expects to improve operations through better throughput, lowering the average length of stay, and reducing labor expenses, Fitch said.
MemorialCare has a stable outlook at its new rating.
