Here are 11 acute-care hospitals and health systems with strong operational metrics and solid financial positions, based on Fitch Ratings reports from the past month.
1. Carroll Hospital Center in Westminster, Md., had its "BBB+" rating affirmed. In fiscal year 2013, the hospital had a 3.7 percent operating margin and 12.2 percent operating EBITDA margin, both above the "BBB+" medians of 1.8 percent and 9 percent, respectively.
2. Ann & Robert H. Lurie Children's Hospital of Chicago has maintained an "AA-" credit rating. Between 2009 and 2013, the hospital has averaged an operating EBITDA margin of 11.8 percent. As of this past November, Lurie Children's also had 343 days of cash on hand.
3. Baptist Health Care, a four-hospital system in Pensacola, Fla., increased its operating income by 55 percent in FY 2013 to $26.8 million. Fitch, which affirmed the health system's "BBB+" rating, said meaningful use funds, volume growth in orthopedics and cardiology and cost management have helped keep margins above average.
4. McLeod Health, a five-hospital system in Florence, S.C., had its "AA-" credit rating affirmed. Fitch said the health system "consistently" has strong operating profitability. In 2013, McLeod's operating EBITDA margin stood at 14.5 percent, and the system had 380 days of cash on hand.
5. Pocono Health System in East Stroudsburg, Pa., witnessed some compressed operating profitability in 2013. However, the system, which operates 235-bed Pocono Medical Center, has maintained "robust liquidity metrics," according to Fitch. As of December, Pocono had nearly 256 days cash on hand and a cushion ratio of 18.9x, both well above Fitch's "A" category medians.
6. Marshall Medical Center in Placerville, Calif., has a "BB+" credit rating, and Fitch said the 113-bed hospital has achieved steady financial results since it opened a three-story expansion in 2012. The hospital posted a 2.6 percent operating margin in 2013, and Fitch said Marshall's "strong market position" should continue to boost its finances going forward.
7. Blanchard Valley Health System in Findlay, Ohio, has an "A" rating and is one of the strongest providers in the area. Between 2010 and 2012, BVHS has recorded operating margins between 9.2 percent and 10.8 percent — well above the national average. In 2013, the system also had 405 days of cash on hand.
8. Virginia Hospital Center in Arlington recently received a credit upgrade to "AA-" from "A+" due to its strong operating profile and financial leadership. The independent hospital posted an operating margin of 5.1 percent in 2012 and 6.3 percent in 2013. Virginia Hospital Center also had 704 days cash on hand at the end of last year.
9. Boca Raton (Fla.) Regional Hospital has made a major comeback, according to Fitch. The 380-bed hospital, which has a "BBB-" rating, posted a positive operating margin in 2013 for the first time since 2006, and net patient service revenue grew 8.3 percent year over year in the first quarter of FY 2014.
10. Salem (Ore.) Health maintained its "A" credit rating last month, as Fitch said the hospital posted an improving 4.1 percent operating margin in 2013. Salem Health owns 77 percent of the inpatient market in the area, which Fitch said is its primary credit strength.
11. Oregon Health & Science University in Portland, which includes two hospitals within its academic medical center, has an "A+" rating. Operating income almost doubled from 2012 to 2013, with OHSU posting a 4.6 percent operating margin and nearly 200 days cash on hand.
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