S&P Global Ratings maintained 20 ratings without revising the outlooks, took four rating actions, and revised three outlooks without changing the ratings in the U.S. not-for-profit health care sector in February 2023. In addition, two ratings were placed on CreditWatch, one with negative implications, and one developing, and we revised one outlook to positive from developing. One of the two CreditWatch placements as well as the outlook revision to positive from developing were related to mergers and acquisitions. There was one new sale in the month, for which the rating and outlook were unchanged.
The seven rating actions consist of the following:
- Four downgrades on three health care systems and one stand-alone hospital, all now in the 'BBB' and 'Speculative Grade' categories; and
- Three unfavorable outlook revisions to negative from stable on two stand-alone hospitals and one health care system, all in the 'BBB' and 'Speculative Grade' categories.
Chart 1
Chart 2
February 2023, U.S. Not-For-Profit Health Care Rating Actions | ||||||
---|---|---|---|---|---|---|
Hospitals | State | Rating | Outlook | Entity type | Action | Description |
Antelope Valley Healthcare District | CA | BBB | Negative | Stand-alone | Unfavorable outlook revision | Weak performance with negative operating margins along with modest debt service coverage |
Bibb County Health Care Authority | AL | BB | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
Care New England | RI | B+ | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating |
Carson Tahoe Regional Healthcare | NV | BBB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
Concordia Lutheran Ministries | PA | AA- | Stable | Long-term care | Maintained | Credit quality consistent with existing rating |
Cook Children's Medical Center | TX | AA | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
Eastern Maine Healthcare Systems | ME | BBB | Negative | System | Unfavorable outlook revision | Weak operating results that are expected to continue |
Fairview Health Services | MN | BBB+ | Stable | System | Downgrade | Operating losses leading to significantly lower unrestricted reserves and weak debt service coverage |
H. Lee Moffitt Cancer Center & Research Institute | FL | A- | Positive | Stand-alone | Maintained | Credit quality consistent with existing rating |
Lee Memorial Health System | FL | A+ | Stable | System | Maintained | Credit quality consistent with existing rating |
Marshfield Clinic Health System | WI | BBB+ | Stable | System | Downgrade | Uneven performance with sizable operating losses |
Masonic Villages of the Grand Lodge of Pennsylvania | PA | A | Stable | Long-term care | Maintained | Credit quality consistent with existing rating |
Northern Inyo County Local Hospital District | CA | B+ | Negative | Stand-alone | Unfavorable outlook revision | Weakened financial performance with negative debt service coverage and decreasing unrestricted reserves |
Penn Highlands Healthcare | PA | A- | Negative | System | Maintained | Credit quality consistent with existing rating |
Princeton Community Hospital | WV | BBB | Positive | Stand-alone | Outlook revised from developing | Affiliation agreement with West Virginia University Health System finalized |
RUSH Obligated Group | IL | A+ | Stable | System | Maintained | Credit quality consistent with existing rating |
RWJ Barnabas Health | NJ | AA- | Stable | System | Maintained | Credit quality consistent with existing rating |
Saint Francis Health System | OK | AA+ | Stable | System | Maintained | Credit quality consistent with existing rating |
Saratoga Hospital | NY | A | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
Seven Hills Foundation | MA | BBB- | Stable | Long-term care | Maintained | Credit quality consistent with existing rating |
Sparrow Obligated Group | MI | A- | Not meaningful | System | Placed on CreditWatch developing |
Pending the outcome of a possible merger with University of Michigan Health |
St. Francis Regional Medical Center | MN | A- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
Stamford Hospital | CT | BBB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
The Health Care Authority for Baptist Health | AL | BBB+ | Stable | Stand-alone | Maintained; new sale | Credit quality consistent with existing rating |
Tower Health | PA | B | Negative | System | Downgrade | Ongoing operating losses and a steep decline in unrestricted reserves |
UC Health | OH | BBB+ | Negative | Stand-alone | Downgrade | Escalating losses primarily as a result of elevated labor costs |
UNC Southeastern Regional Medical Center | NC | BBB+ | Not meaningful | Stand-alone | Placed on CreditWatch negative | Insufficient financial information and some evidence of weakened unrestricted reserves and negative operating performance |
University of Colorado Hospital Authority | CO | AA | Stable | System | Maintained | Credit quality consistent with existing rating |
University of Kansas Hospital Authority | KS | AA- | Stable | System | Maintained | Credit quality consistent with existing rating |
White River Health System Inc. | AR | BBB- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating |
This report does not constitute a rating action.
Primary Credit Analyst: | Blake C Fundingsland, Englewood + 1 (303) 721 4703; blake.fundingsland@spglobal.com |
Secondary Contacts: | Cynthia S Keller, Augusta + 1 (212) 438 2035; cynthia.keller@spglobal.com |
Suzie R Desai, Chicago + 1 (312) 233 7046; suzie.desai@spglobal.com |
No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.