The outlook downgrade was based on a number of factors, including the decline in Houston Healthcare’s operating margins through the first nine months of fiscal year 2014. The system’s operating cash flow also declined during that time.
Competition in Houston Healthcare’s primary service area and the system’s year-over-year decline in outpatient surgeries also contributed to the outlook revision. From fiscal year 2009 to fiscal year 2013, surgeries were down 37.6 percent at Houston Healthcare.
The system’s strengths such as having the only acute-care hospitals in HoustonCounty were also considered for the credit rating affirmation and the outlook revision.
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