Despite the pressures of the economic downturn, the credit quality of not-for-profit hospitals in California has remained strong, according to a new report by Fitch Ratings, Becker's Hospital Review reports.
The report evaluated the credit quality of 24 California-based not-for-profit hospitals and health systems in October 2010. Of the 24 institutions, the report ranked:
- 16 in the "A" category or higher;
- Seven in the "BBB" category; and
- One in the "D" category.
The report also found that California acute care hospitals have a median total operating revenue of $1.35 billion, compared with the nationwide median operating revenue of $506 million (Dunn, Becker's Hospital Review, 10/19).
Challenges in California
According to Fitch Ratings, the strong credit quality of California's not-for-profit hospitals is particularly noteworthy because the state's hospitals face pressure from:
- A mandate to seismically retrofit health care facilities;
- California's persistently late budget;
- Low Medicaid reimbursement rates; and
- Strict staffing requirements (Fitch Ratings release, 10/18).