Last week, Novi, Mich.-based Trinity Health and Newtown Square, Pa.-based Catholic Health East said they planned to merge their two massive health systems. This proposed "mega-merger" is one of the biggest this year, and its sheer size could positively impact the entire non-profit hospital sector, according to a Moody's Investors Service report.
Moody's Associate Managing Director Lisa Goldstein said consolidation is an overall credit positive within the non-profit hospital industry, which generally has a negative outlook, and the Trinity-Catholic Health East deal represents the first multistate system-to-system merger since the mid-1990s.
Moody's portfolio has 16 multistate health systems. Trinity is the fifth largest with $8.4 billion in annual revenue, and Catholic Health East is the eighth largest with $4.3 billion. The merged system would become the second-largest non-profit, multistate hospital system in the country in revenue after St. Louis-based Ascension Health.
In the long term, Moody's expects large operating savings "as the enterprises leverage their skill and scale," and more system-to-system mergers may be on the horizon as more systems look to accomplish those same goals.
Moody's Associate Managing Director Lisa Goldstein said consolidation is an overall credit positive within the non-profit hospital industry, which generally has a negative outlook, and the Trinity-Catholic Health East deal represents the first multistate system-to-system merger since the mid-1990s.
Moody's portfolio has 16 multistate health systems. Trinity is the fifth largest with $8.4 billion in annual revenue, and Catholic Health East is the eighth largest with $4.3 billion. The merged system would become the second-largest non-profit, multistate hospital system in the country in revenue after St. Louis-based Ascension Health.
In the long term, Moody's expects large operating savings "as the enterprises leverage their skill and scale," and more system-to-system mergers may be on the horizon as more systems look to accomplish those same goals.
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Moody's: Higher Insured Numbers Bode Well for Non-Profit Hospitals
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