“The negative outlook reflects our opinion that there is a one-in-three chance that the district might not be able to improve its net performance and already light days’ cash position beyond 2017 due to possible near-term operating challenges at El Paso Children’s Hospital. The outlook also reflects an ongoing pressured revenue environment including the possible expiration of the 1115 waiver program that helps support a significant level of supplemental funding for UMC,” said S&P analyst Jennifer Garza.
The ratings agency also affirmed the “A-” rating on the medical center’s GO debt and assigned an “A-” rating and negative outlook to the medical center’s series 2017 tax-exempt GO refunding bonds.
The ratings affirmation and assignment are based on a number of factors, including UMC’s concentrated governmental payer mix and sizeable charity care and its weakened financial profile.
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