Doylestown Health (Pa.) group, which operates Doylestown Hospital and several other clinics and urgent care facilities, is undergoing a strategic review as it faces "extraordinary and unprecedented financial hardship."
The move comes as S&P Global Ratings downgraded the group's credit score from "BB" to "CCC" amid concern it will not meet several debt obligations and covenants, including a requisite number of days of cash on hand, according to a Dec. 27 news release from the health system. Doylestown Health said it has been in discussions with lenders to potentially change the terms of such agreements.
"In order to recover from the financial impact of the pandemic, we are undertaking a comprehensive look inside our organization and operations to identify opportunities for improvements, efficiencies, and enhanced sources of revenue," the health system said in the release. The group is working with ECG, a national healthcare consulting firm.
S&P's downgrade also reflects what it called the group's "steep decline in operating performance" amid a high cash burn rate and elevated labor costs.
Doylestown Hospital, about 40 miles north of Philadelphia, said it had an operating loss of $24.34 million for the 12-month period ending Sept. 30.