Boston-based Steward Health Care has been struggling to make a profit since 2012. However, a recent upgrade from Moody's Investors Service is a sign the for-profit health system is starting to turn things around, according to the Boston Business Journal.
Steward is a 10-hospital system that was created in 2010 from the acquisition of six Caritas hospitals. From 2012 to 2014, the health system saw consecutive operating losses, with a $22.2 million operating loss in 2012, a $55 million operating loss in 2013 and a $75 million operating loss in 2014, according to a December report from Attorney General Maura Healey, the Boston Business Journal reported.
However, Moody's recently upgraded Steward's bonds to "B2" from "B3." Moody's said Steward's restructuring, including the closure of QuincyMedicalCenter in 2014, will help the system generate improved operating results, according to the report.
"The rating agency also expects Steward to have lower capital spending and a reduction in cash pension plan contributions in the years ahead," the Moody's release said. "These improvements will enhance liquidity through increased free cash flow and provide the capacity to repay debt."
The rating agency said Steward could see another upgrade if it increases scale and diversification, according to the report.
Steward provided the Boston Business Journal with a emailed statement that said its improved financials were a result of its business model, which provides healthcare for patients on a budgeted basis instead of receiving reimbursements for every service rendered, according to the report.