Hospital Sisters Service outlook revised downward amid 'meaningful' operating losses

Springfield, Ill.-based Hospital Sisters Health System had its outlook revised to negative as it continued to experience "a meaningful deterioration in operating performance" with no quick turnaround expected, S&P Global said March 29.

Such a deterioration is due to industry-wide labor and wage pressures, service rationalization, patient throughput challenges, and inflationary pressures, the research note said. The agency affirmed its "A+" rating on various bonds.

While there are initiatives in place to reverse fortunes, it isn't going to be a quick process, S&P Global said.

"Although we expect HSHS' operations to progressively trend toward breakeven over the outlook period, we acknowledge that returning to profitability will likely be a multiyear process."

The system, which operates 15 hospitals in Illinois and Wisconsin, is planning about $100 million in capital spending in 2023, down on 2022 figures as management further tries to reduce costs.

HSHS reported an operating loss of $67 million in fiscal 2022.

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