Moody's Investors Service has updated its credit rating methodology when assigning ratings to non-profit hospitals and health systems with a new scorecard that incorporates both a quantitative grid and qualitative factors, according to a March Moody's report.
The five main factors on Moody's scorecard include:
• Market position
• Operating performance
• Balance sheet and capital plan
• Governance and management
• Debt structure and legal covenants
The new scorecard replaces Moody's 2008 matrix and will provide more "measurable and descriptive characteristics by broad rating category for each of the five key factors" on its weighted quantitative grid, according to the report. The scorecard will also provide more transparency and clarity on how Moody's assesses credit quality in the non-profit hospital and health system sector.
Market position — which includes the hospital or health system's total revenue, revenue growth rate and Medicare/Medicaid payor mix — comprises 45 percent of the weight on the scorecard, the most of any factor.
Moody's said it does not expect this new methodology will result in any ratings changes. Currently, Moody's rates 533 U.S. non-profit hospitals and health systems with a combined $181 billion of outstanding debt.
The five main factors on Moody's scorecard include:
• Market position
• Operating performance
• Balance sheet and capital plan
• Governance and management
• Debt structure and legal covenants
The new scorecard replaces Moody's 2008 matrix and will provide more "measurable and descriptive characteristics by broad rating category for each of the five key factors" on its weighted quantitative grid, according to the report. The scorecard will also provide more transparency and clarity on how Moody's assesses credit quality in the non-profit hospital and health system sector.
Market position — which includes the hospital or health system's total revenue, revenue growth rate and Medicare/Medicaid payor mix — comprises 45 percent of the weight on the scorecard, the most of any factor.
Moody's said it does not expect this new methodology will result in any ratings changes. Currently, Moody's rates 533 U.S. non-profit hospitals and health systems with a combined $181 billion of outstanding debt.
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