Fitch downgraded DuBois, Pa.-based Penn Highlands Healthcare's rating from "A-" to "BBB."
The downgrade reflects fiscal year 2024 results through March that have not kept pace with Fitch's prior expectations, according to an Aug. 29 report from the ratings agency. The system reported a $16 million operating loss compared with a budgeted $9 million loss for the fiscal year and has experienced "significant deterioration in unrestricted liquidity."
Fitch said the system continues to face significant headwinds related to an unprecedented inflationary environment, workforce shortages and integration challenges related to its series of acquisitions over the past three years.
The system has a negative outlook with Fitch. The ratings agency said this reflects its expectation that Penn Highlands' operating performance will remain challenged, with losses expected to persist in fiscal year 2025 at reduced levels.