Becker's Hospital Review

12 CFO / FINANCE 14 health systems with strong finances By Andrew Cass H ere are 14 health systems with strong operational metrics and solid financial positions, according to reports from credit rating agencies Fitch Ratings, Moody's Investors Service and S&P Global in 2023. Note: is is not an exhaustive list. Health system names were compiled from credit rating reports. 1. Berkshire Health has an "AA-" rating and stable outlook with Fitch. e Pittsfield, Mass.-based system has a strong financial profile, solid liquidity and modest leverage, according to Fitch. 2. CaroMont Health has an "AA-" rating and stable outlook with S&P Global. e Gastonia, N.C.-based system has a healthy fi- nancial profile and robust market share in a competitive region. 3. CentraCare has an "AA-" rating and stable outlook with Fitch. e St. Cloud, Minn.-based system has a leading market posi- tion, and its management's focus on addressing workforce pres- sures, patient access and capacity constraints will improve oper- ating margins over the medium term, Fitch said. 4. Cone Health has an "AA" rating and stable outlook with Fitch. e rating reflects the expectation that the Greensboro, N.C.- based system will gradually return to stronger results in the me- dium term, the rating agency said. 5. El Camino Health has an "AA-" rating and stable outlook with Fitch. e Mountain View, Calif.-based system has a history of generating double-digit operating EBITDA margins, driven by a solid market position that features strong demographics and a very healthy payer mix, Fitch said. 6. Harris Health System has an "AA" rating and stable outlook with Fitch. e Houston-based system has a "very strong" rev- enue defensibility, primarily based on the district's significant taxing margin that provides support for operations and debt ser- vice, Fitch said. 7. Novant Health has an "AA-" rating and stable outlook with Fitch. e Winston-Salem, N.C.-based system has a highly com- petitive market share in three separate North Carolina markets, Fitch said, including a leading position in Winston-Salem (46.8 percent) and second only to Atrium Health in the Charlotte area. 8. Orlando (Fla.) Health has an "AA-" and stable outlook with Fitch. e system's upgrade from "A+" reflects the continued strength of the health system's operating performance, growth in unrestricted liquidity and excellent market position in a de- mographically favorable market, Fitch said. 9. Rush System for Health has an "AA-" and stable outlook with Fitch. e Chicago-based system has a strong financial profile de- spite ongoing labor issues and inflationary pressures, Fitch said. 10. Saint Francis Healthcare System has an "AA" rating and stable outlook with Fitch. e Cape Girardeau, Mo.-based system en- joys robust operational performance and a strong local market share as well as manageable capital plans, Fitch said. 11. Salem (Ore.) Health has an "AA-" rating and stable outlook with Fitch. e system has a "very strong" financial profile and a lead- ing market share position, Fitch said. 12. UCHealth has an "AA" rating and stable outlook with Fitch. e Aurora, Colo.-based system's margins are expected to remain robust, and the operating risk assessment remains strong, Fitch said. 13. University of Kansas Health System has an "AA-" rating and stable outlook with S&P Global. e Kansas City-based system has a solid market presence, good financial profile and solid management team, though some balance sheet figures remain relatively weak to peers, the rating agency said. 14. Willis-Knighton Health System has an "AA-" rating and sta- ble outlook with Fitch. e Shreveport, La.-based system has a "dominant inpatient market position" and is well positioned to manage operating pressures, Fitch said. n McLaren hospital to close By Alan Condon M cLaren St. Luke's in Maumee, Ohio, will close and cease all outpatient services by mid- May after years of declining revenues and an unstable reimbursement environment, according to a March 3 news release. Grand Blanc, Mich.-based McLaren Health Care and Cincinnati-based Mercy Health are working to finalize an asset purchase agreement in which Mercy will acquire McLaren St. Luke's facilities, land and physical assets. Mercy will work with WellCare Physicians Group practices through the transition with the goal of maintaining continuity of patient care. "Despite the tireless dedication of everyone associated with McLaren St. Luke's, we have not been able to overcome the historic financial losses experienced by this hospital — losses that began long before COVID-19 that now run into the millions each month," Jennifer Montgomery, RN, president and CEO of the hospital, said in the release. "Our passion for patient care and commitment to clinical excellence have never wavered. But sadly, we are not on a financially sustainable path." The hospital has begun notifying employees, patients, regulators and community partners of plans to discontinue operations. Current patients will complete their care, and the hospital will begin to reduce admissions and wind down other clinical operations in the weeks ahead. Mercy expects to extend employment opportunities to a significant percentage of the hospital's physicians and employees. n

• Cover