Billings (Mont.) Clinic, which Sept. 1 merged with Kalispell, Mont.-based Logan Health, saw its outlook revised from stable to negative amid persistent operating challenges, Fitch Ratings said Oct. 16.
The system's default rating and that on a series of bonds were affirmed at "AA-."
The forward-looking scenario for Billings Clinic reflects the combined balance sheet strength of the newly merged system, Fitch said. The new system had almost $1.9 billion in revenue in fiscal year 2023, with a combined operating margin of -4%.
"The negative outlook reflects the considerable operating pressure that Billings Clinic has faced, particularly in FY23," Fitch said. "Fitch believes, however, that considerable operating improvement should be recorded relatively quickly due to its good operating track-record, leading position in quality service areas, and a realistic operating improvement plan. Absent meaningful operating gains in FY24 and FY25, rating could be pressured."