The affirmation of the rating was based on Centra’s strong market position, as it is the sole provider in its primary service area. Centra has a 90 percent market share in Lynchburg. In addition, the healthcare system’s operating margins have remained strong, and Centra reported a 10.2 percent operating cash-flow margin for the first six months of 2014.
Centra is also facing some challenges, such as a payer mix that is comprised of 77 percent government and self pay patients. In addition, the health system’s unrestricted liquidity has slightly declined this year due to a number of factors, including the acquisition of Bedford (Va.) Memorial Hospital for $12 million. Over the next five years, Centra will make an estimated $11 to $12 million in capital investments in Bedford Hospital.
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8 recent hospital rating and outlook changes, affirmations
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