23 hospitals, health systems hit with ratings downgrades this year

23 hospitals, health systems hit with ratings downgrades this year unknown

Several hospitals and health systems have experienced downgrades to their financial ratings this year amid ongoing operating losses, declines in investment values and challenging work environments.

Here are 23 hospitals and health systems that received credit rating downgrades since January:

1. Butler (Pa.) Health: Butler, which merged with Greensburg, Pa.-based Excela Health to form Independence Health System in January, saw its credit rating downgraded from "A" to "BBB. The move reflects continued operating challenges and low patient volumes, according to Fitch Ratings.

2. UNC Southeastern: Part of Chapel Hill, N.C.-based UNC Health system, UNC Southeastern saw its ratings on a series of bonds downgraded to "BB" amid operating losses and sustained weakness in its balance sheet, according to S&P Global.

3. UC Health (Cincinnati): Moody's Investor Service downgraded the system to a "Baa3" grade in May. That move followed a similar downgrade because of "significantly escalating losses" in February.

4. Yale New Haven (Conn.) Health: The system's bond rating slipped from "Aa3" to "A1" due to operating weakness and elevated debt, Moody's said May 5.

5. ProMedica (Toledo, Ohio): ProMedica had its ratings on various bonds and its default grade downgraded to "BB-" from "BB+". The move reflected the "precipitous decline in liquidity" in fiscal 2022, according to Fitch.

6. Baptist Health Care (Pensacola, Fla.): BHC had the rating downgraded on a series of its bonds as a reflection of "pressured operating performance and cash flow," S&P Global said April 19.

7. Baystate Health (Springfield, Mass.): Baystate Health had ratings downgraded on specific bonds related to its flagship medical center, S&P Global said April 12. While ratings were affirmed on other debt, those on others specific to the 780-bed Baystate Medical Center were downgraded to "A" from "A+".

8. Penn State Health (Hershey, Pa.): Higher-than-expected operating losses led to Penn State Health being downgraded on a series of bonds from "A+" to "A," S&P Global said April 6.

9. Providence (Renton, Wash.): The 51-hospital system recorded the first of three downgrades in the space of a few weeks March 17 when Fitch Ratings attached an "A" grade to both the system's default rating and a series of bonds worth about $7.4 billion. S&P Global then downgraded Providence to the same notch from "A+" March 21 amid higher expenses and an expectation of only a multiyear process of recovery, while Moody's downgraded a series of Providence bonds from "A1" to "A2."

10. Thomas Jefferson University (Philadelphia): Thomas Jefferson University received a credit downgrade with cash flow margins expected to stay low for "several years," Moody's said March 30.

11. Oaklawn Hospital (Marshall, Mich.): The 68-bed community hospital was downgraded to "BBB-" from "BBB" as it reported operating losses due to higher expenses and length of patient stay, Fitch said March 29.

12. DCH Health (Tuscaloosa, Ala.): The three-hospital system saw its rating on a series of bonds lowered to "A-" from "A" as it continues to suffer operating losses, S&P Global said March 29.

13. AU Health System (Augusta, Ga.): AU Health was downgraded March 23 amid concern over negative cash flow and that it may breach covenant agreements later this year, Moody's said. The downgrade to "B2" from "Ba3" applies to revenue bonds the system holds.

14. PeaceHealth (Vancouver, Wash.): "Considerable operating stress" was the driver behind Fitch Ratings downgrading the 10-hospital system March 21. The downgrade to "A+" from "AA-" applied to both the system's default rating and on a series of bonds.

15. Mercy Iowa City (Iowa) Hospital: The hospital, part of Des Moines, Iowa-based MercyOne, was downgraded March 16 to "Caa1" from "B1" because of what Moody's called "severe cash flow deterioration." The "Caa1" categorization is seen as "substantial risk."

16. Tufts Medicine (Boston): Tufts Medicine was downgraded from "BBB+" to "BBB" both on its default rating and on various bonds as the health system continues to endure significant financial challenges, Fitch Ratings said Feb. 28.

17. Northern Regional Hospital (Mount Airy, N.C.): The 133-bed public hospital saw its rating on specific bonds downgraded as it faces sustained financial challenges, S&P Global said March 2. The downgrade to "BB+" from "BBB" reflects widening operating losses and unrestricted reserves continuing to decline from its last review, S&P said.

18. Community Health System (Fresno, Calif.): The three acute care hospital system saw ratings on a series of its bonds downgraded amid sustained financial struggles, S&P Global said March 3.

19. Overlake Hospital Medical Center (Bellevue, Wash.): The 310-bed community hospital on the eastern side of Seattle saw its rating on a series of bonds downgraded to "Baa1" from "A2" while its outlook remained negative, Moody's said March 9.

20. Geisinger Health System (Danville, Pa.): Moody's Investors Service downgraded Geisinger Health System's outstanding bonds from "A1" to "A2" Feb. 13 amid expectations of continued cash flow weakness.

21. Marshfield (Wis.) Clinic Health System: The system suffered a credit downgrade because of recent operating losses and amid expectations of no immediate financial improvement. The S&P Global move Feb. 7 to downgrade the system to "BBB+" from "A-" follows a similar move from Fitch Jan. 18.

22. Tower Health (West Reading, Pa.): Tower Health was hit with a rating downgrade on its bonds in February, according to S&P Global, which revised the system's outlook to negative.

23. Fairview Health (Minneapolis): Moody's Investors Service downgraded the revenue bond ratings of Fairview Health from "A3" to "Baa1." The downgrade reflects Moody's projection that weak operating performance will be challenging to overcome due to increased labor costs and lower inpatient volume.