Maintaining investment-grade credit from rating agencies has become a focus for healthcare CFOs and financial leaders, especially as reimbursements decline.
Moody's Investors Service has 10 levels of investment-grade, long-term ratings, ranging from a high of "Aaa" down to "Baa3." Many hospitals and health systems sit within the three subcategories of "A" ratings: "A1," "A2" and "A3." In August, Moody's issued its annual medians report for nonprofit hospitals, and overall profitability metrics were down.
But how did hospitals with "A" ratings fare? Based on Moody's medians, many got larger and maintained more beds, perhaps due to consolidation in the industry, but the primary financial metrics stayed relatively stagnant or fell slightly. One other observation: Cash continues to be king, as days cash on hand continued its rise among investment-grade hospitals.
Here are 45 statistics on various hospital metrics from Moody's, sorted by hospital rating. Note: All data are medians from 2012 and are for only the three subcategories of "A" ratings. Moody's data reflects freestanding hospitals as well as single-state and multistate health systems in its portfolio. To compare with medians of "A"-rated hospitals from 2011, click here.
Hospitals rated "A1" (sample size: 58)
Maintained beds: 614
Admissions: 28,902
Observation stays: 8,249
Outpatient surgeries: 15,479
Net patient revenue: $746.6 million
Total operating revenue: $859.4 million
Operating income: $32.5 million
Total profit (including investments): $67.2 million
Net fixed assets: $495.9 million
Operating margin: 3.6 percent
Operating cash flow margin: 10.9 percent
Days cash on hand: 218.8
Days in accounts receivable: 50.3
Debt-to-capitalization: 34.7 percent
Average age of plant: 10.2 years
Hospitals rated "A2" (sample size: 77)
Maintained beds: 443
Admissions: 24,661
Observation stays: 6,509
Outpatient surgeries: 12,058
Net patient revenue: $464.7 million
Total operating revenue: $505 million
Operating income: $17.6 million
Total profit (including investments): $38.6 million
Net fixed assets: $284.9 million
Operating margin: 3.2 percent
Operating cash flow margin: 10.2 percent
Days cash on hand: 207.9
Days in accounts receivable: 50.7
Debt-to-capitalization: 37.3 percent
Average age of plant: 10.5 years
Hospitals rated "A3" (sample size: 61)
Maintained beds: 344
Admissions: 19,573
Observation stays: 5,284
Outpatient surgeries: 9,048
Net patient revenue: $391.9 million
Total operating revenue: $419.8 million
Operating income: $8.2 million
Total profit (including investments): $17.7 million
Net fixed assets: $240.2 million
Operating margin: 1.9 percent
Operating cash flow margin: 10 percent
Days cash on hand: 175.9
Days in accounts receivable: 48.6
Debt-to-capitalization: 41 percent
Average age of plant: 10.4 years
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