Houston-based Harris Health System had its overall credit rating and that on specific bonds and other debt affirmed at "AA" because its strong tax revenue base largely offsets what Fitch Ratings called a "weak payor mix" and concerns about long-term capital expenditure.
The system, described by Fitch as among the 10 largest hospital districts in the country, is supported by up to $3 billion from the local tax base. In 2022, revenues totaled $4.5 billion, which included $815 million in property taxes, Fitch said.
Weaknesses in the system include uncertainty surrounding the potential costs and timing of capital projects to address aging infrastructure, Fitch said. Such costs are expected to exceed $1 billion.
In addition, the system has a high combined exposure to Medicaid and self-pay, totaling 67 percent of its payer mix, Fitch said.
The outlook for the system, which includes two acute care hospitals (Ben Taub General Hospital and Lyndon B. Johnson Hospital with a combined total of 617 licensed beds), is stable.