Margins will eventually rebuild to historic levels and a strong management team will help ensure so, Moody's said of MedStar Health as the rating agency affirmed an "A2" credit rating with a stable outlook for the Columbia, Md.-based healthcare system.
In a credit analysis update published Jan. 5, Moody's said the system faces some headwinds with some capital expenditure planned and general pressure in the labor market. But MedStar will also continue to benefit from its strong local market presence.
"With a track record of strong financial discipline contributing to consistently favorable operating results, we expect management will navigate current industry pressures to incrementally rebuild operating cash flow (OCF) margins to durable mid-single digit levels," Moody's said. That will likely not be in 2023, however.
MedStar Health operates 10 hospitals in Washington, D.C., and Maryland, including the Georgetown University facility in the nation's capital, which was recently ranked among the top of its peers.
The system reported a $200 million loss in fiscal 2022, buffeted by a "volatile" investment market.