At a time when other nonprofit hospitals across the nation are being downgraded, Community Medical Centers’ new ratings assessment from Standard & Poor's has been upgraded from BBB/Stable to BBB/Positive. This is a long-term rating/outlook on our hospital revenue bonds.
The improved outlook, which could be a significant benefit to Community’s long-term financial leverage, was based on four main factors:
- An improved balance sheet resulting from good cash flow
- A sizable revenue base with continued solid operating margins
- A strong business position with growing market share
- And completion of the new, all-private bed, Clovis Community Medical Center tower
In addition, the ratings release specifically mentioned Community’s management's continued focus "on efficiencies and expense controls" and their foresight to invest heavily in new facilities, "as evidenced by its low 9.1 year average age of plant."
What makes Community's improved outlook even more significant – and remarkable – is that S&P in December downgraded its official outlook for the industry as a whole.
S&P wrote in its Dec. 10 release: "Negative pressures at U.S. not-for-profit hospitals and health systems are accelerating, and after a period of strong and steady recovery from the recession and financial crisis of 2008, our outlook for the sector is now negative. We expect downgrades will exceed upgrades in 2014."
“Our success has come from courage at a time when it's easy to blink,” said Steve Walter, Community’s chief financial officer. “Expert leadership and planning has provided Community this strong position for the future.”
Mary Lisa Russell reported this story. She can be reached at MedWatchToday@CommunityMedical.org.