Moody's Investors Service has downgraded Fort Lauderdale, Fla.-based Broward Health's underlying rating to "Baa2" from "A2."
The rating downgrade is based on a number of factors, including a decline in operating performance, significant transition in senior leadership and heightened external scrutiny.
In late January, Broward Health President and CEO Nabil El Sanadi, MD, died of a self-inflicted gunshot wound. The goings-on at Broward have only continued. In early February, a private investigator claimed Dr. El Sanadi hired him for an investigation into the public system that led to FBI involvement.
The outlook is negative, reflecting Broward Health's extremely thin cash flow during fiscal year 2016 without a clear plan for regaining operational balance.
Broward Health Interim CFO Art Wallace issued a statement on the Moody's downgrade. "We are disappointed but not surprised by the Moody's downgrade. We are dealing with a substandard start of the fiscal year and the financial impact of a $70.7 million settlement at the same time we adjust to the sudden loss of our CEO," he wrote.
"The positive news is that the system and board are taking active steps to address both the leadership and financial issues," he added. "Our credit ratings have increased in the past and they will once again."