Here is a summary of recent credit downgrades and outlook revisions for hospitals and health systems.
The downgrades and downward revisions reflect continued operating challenges many nonprofit systems are facing, with multiyear recovery processes expected.
Regional West Health Services (Scottsbluff, Neb.): The system, anchored by a flagship 188-bed hospital, was downgraded two notches to "BB-" and placed on a negative rating watch as "sizeable fiscal 2022 operational losses" continue to drag, according to a July 31 Fitch Ratings report.
Heritage Valley Health System (Beaver, Pa.): The two-hospital system near Pittsburgh was downgraded from "AA-" to "A+" July 14.
While management has plans for a financial turnaround, which should lead to some operating recovery in fiscal 2024, results are expected to remain negative over the near term with a "gradual recovery," Fitch said.
PeaceHealth (Vancouver, Wash.): The 11-hospital system saw its credit rating on a series of bonds downgraded to "A-" as it continues to face labor challenges and high average length-of-stay issues, S&P Global said July 7.
The system said it would close five clinics and eliminated 69 positions in late May.
Outlook revisions
Adena Health (Chillicothe, Ohio): The four-hospital system saw its outlook revised downward for the second time in recent weeks amid a decline in cash flow.
It could take Adena Health "several years" to restore such cash flow to prior numbers and have more robust days' cash on hand totals, according to a July 27 Moody's report.
RWJBarnabas Health (West Orange, N.J.): Reduced cash flow and an ongoing need to fund capital projects has resulted in an outlook revision to negative for RWJBarnabas Health, Moody's said July 25.
The system, which includes 12 acute care hospitals, had an "Aa3" rating affirmed on approximately $3.3 billion of debt.
Carle Health (Urbana, Ill.): While its "AA-" long-term credit ratings were affirmed, Carle Health saw its outlook revised to negative as operating income continues to be under pressure, S&P Global said July 27.
The outlook revision applies to the Carle Foundation, which oversees the now eight-hospital system, an insurance arm and outpatient sites.