Marshfield Clinic downgraded amid ongoing operational challenges, Fitch says

Marshfield (Wis.) Clinic Health System has seen its credit rating downgraded as a result of operational challenges resulting from labor pressure as well as from disruption related to the implementation of a new IT system.

The healthcare system had both its Issuer Default Rating and a series of bonds downgraded to "BBB+" from "A-," Fitch said Jan. 18.

Such operating challenges will likely continue into the first half of fiscal 2023 (year-end Dec. 31) and will then begin to moderate as the final wave of the IT implementation is completed, Fitch said.

Marshfield, which has signed a memorandum of understanding with Duluth, Minn.-based Essentia Health to discuss a potential merger, is an integrated regional health system comprising Marshfield Clinic, a large multispecialty physician group, and SHP, a fully integrated health plan with over 225,000 members. It also has a growing presence in acute care, owning and operating 11 such facilities.

Total revenues for the 12 months ended Dec. 31, 2020, were about $2.7 billion derived from Marshfield's two operating divisions, health plan and care delivery, Fitch said, adding it does not consider any potential partnership between Marshfield and Essentia as part of its analysis.

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