King of Prussia, Pa.-based Universal Health Services, one of the largest for-profit health systems in the country, is able to maintain a higher credit rating over many of its peers because of low leverage and a strong operating position, Fitch said Sept. 28.
Ample liquidity, strong operating margins, and a diversified revenue stream — with 40 percent of that coming from behavioral health services — also contribute to its "BB+" default rating, which Fitch affirmed, along with a stable outlook. Long-term debt totaled $4.6 billion as of June 30.
That rating compares with Dallas-based Tenet Healthcare (B+, stable) and Franklin, Tenn.-based Community Health Systems (B-, negative).
"Like other hospital operators, UHS is focusing on expanding health care access points, especially with a focus on higher-acuity services and outpatient development, to boost local market share and strengthen its power in rate negotiations with commercial health insurers, the latter becoming a point of emphasis amid the industry's challenging labor conditions," Fitch said in its note.