Mount Sinai Hospital hit with rating downgrade

Moody’s Investors Service has downgraded Mount Sinai Hospital’s rating to “Baa1” from “A3” as the agency expects the system’s operating performance and liquidity to be below historical averages for several years.

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Three things to know:

1. Mount Sinai Hospital’s weaker performance is partly driven by higher permanent labor costs, according to Moody’s. Its liquidity will continue to be negatively affected by material transfers to support losses at affiliate hospitals and network expansion as well as a relatively high allocation to alternative investment strategies.

2. The “Baa1” is supported by the system’s high acuity services in a competitive market, which will support volume growth, Moody’s said. 

3. Research, commercialization opportunities and fundraising at the Icahn School of Medicine at Mount Sinai will benefit the system while an accelerated improvement plan, Medicaid rate increases and completion of an IT platform will help improve operating performance. 

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