Fitch affirms Ballad Health credit rating at ‘A’ with ‘stable’ outlook
JOHNSON CITY, Tenn., March 09, 2021 (GLOBE NEWSWIRE) -- Fitch Ratings, New York, today announced it has affirmed the credit rating for Ballad Health with a “stable” outlook. This rating was based on the most recent financial results reported by Ballad Health, which reflect losses primarily associated with the effects of the coronavirus disease 2019 (COVID-19) global pandemic.
“Though the pandemic continues to pose challenges for Ballad Health, its management team has transformed clinical operations to support COVID-19 and non-COVID-19 patients and implemented a corporate emergency operations center to successfully manage capacity,” the rating agency stated. “Ballad, as most of the sector, saw operating income levels decline in 2020 due to the coronavirus’s impact and the temporary loss of non-emergent (elective) procedures. The weaker (financial) performance was driven by a dramatic increase in COVID-19 cases in July 2020 and a second spike in October 2020. As volumes declined, management worked to aggressively reduce operating cost…”
Fitch also cited Ballad Health’s strong cash management and “sound” liquidity, while at the same time making a nearly $200 million investment into a common technology platform conversion – an unparalleled deployment during a massive global pandemic. The conversion to Epic, the information technology platform, was accomplished on time and under budget, while at the same time, Ballad Health implemented a new network platform and installed more than 15,000 new computers throughout the system.
“Confronting the unparalleled challenges presented by the pandemic, it is clear that Ballad Health, as one system, was able to respond in a much more coordinated way than we could have if we had not merged to become Ballad Health,” said David Lester, Ballad Health’s Lead Independent Board of Directors member. “As a board of directors, we immediately took the proper steps last February to ensure management had the tools and flexibility they needed to operationally and financially respond to the unknown consequences of the pandemic. Management moved quickly to shore up staffing, develop industry-leading predictive modeling, and throughout the pandemic, it leaned into responding to the needs of the community.
“We are proud that Fitch recognizes our performance and the capabilities of the board and management team with this affirmation of our ‘A’ rating. Our stewardship of these assets relies upon sound financial management, which has certainly been challenged this year.”
“When the pandemic was emerging as a threat, our board of directors unanimously agreed that Ballad Health would do whatever it needed to do to support our region and our communities,” said Ballad Health Chairman and Chief Executive Officer Alan Levine. “Our philosophy as a locally governed health system is to first care for the people in our region, with the faith that sound financial stewardship will lead to long-term success. Against the backdrop of many systems being downgraded due to losses experienced throughout the industry, we are proud of our team members and physicians who have stuck with us through this with the singular goal of caring for our region.”
Levine pointed to decisions made by Ballad Health to invest more, rather than less, into nursing and other clinical support staff, with an eye toward the nursing shortage and its prioritization of providing stable staffing as the community climbs out of the pandemic. Ballad Health increased nursing wages “significantly” during the pandemic, even as the system sought to reduce other expenses.
“We had a choice to make either short-sighted decisions to reduce our losses, or rather to invest in the long-term stability of our nursing staff,” Levine said. “Ballad Health chose to guarantee nursing hours, increase base pay, provide certain additional benefits to all staff and generally to lean into having our staff’s back during this tragic emergency. Their heroic efforts demanded nothing less. We knew this would have financial consequences in the near-term, and there will be pressure on labor costs going forward as we continue to stand by our nursing team, but we strongly believe this will lead to better results for our patients and, ultimately, more sound financial results over time. We are grateful Fitch recognizes this strategy.”
More information about Ballad Health is available at www.balladhealth.org.
About Ballad Health
Ballad Health is an integrated healthcare system serving 29 counties of Northeast Tennessee, Southwest Virginia, Northwest North Carolina and Southeast Kentucky. Our system was created to improve the health of the people we serve. Ballad Health operates a family of 21 hospitals, including three tertiary medical centers, a dedicated children’s hospital, community hospitals, three critical access hospitals, a behavioral health hospital, an addiction treatment facility, long-term care facilities, home care and hospice services, retail pharmacies, outpatient services and a comprehensive medical management corporation. At Ballad Health, we’re completely invested in our communities because we’re your neighbors, and this is our community, too. We’re here to listen to you and address your unique needs – and we’ll always be accountable. Learn more at www.BalladHealth.org.
Ashlea Ramey Ballad Health 423-427-1356 email@example.com