Catholic Health Initiatives’ headquarters.
Fitch Ratings has cut the credit rating of Englewood, Colo.-based Catholic Health Initiatives by three notches, citing the integrated health system’s weakening finances. Meanwhile, A.M. Best Co. downgraded the rating of CHI’s health-insurance subsidiary.
Fitch said the big system is struggling “to rein in the losses throughout a substantial part of its operations.”
CHI reported that in the first nine months of the current fiscal year it had a net loss of $568.1 million. Health IT costs, investment losses and troubles with its health insurance company spearheaded the massive deficit. CHI’s credit rating from Fitch, which covers $6 billion of outstanding debt, was cut to BBB+ from A+.
Modern Healthcare reported that Fitch believes CHI “may need two to three years to fully implement its financial-turnaround plan. “High labor and supply costs, as well as difficult collections from the rising number of patients with high-deductible health plans, pose additional challenges for the hospital system, Fitch analysts said,” Modern Healthcare reported.
To read a Modern Healthcare article on CHI’s troubles, please hit this link.