Moody’s Investors Service has affirmed Adena Health System’s A3 rating with a stable outlook. Moody’s Investors Service is a New York-based, nationally-prominent company that ranks the creditworthiness of a business.
Each year, Health System leaders present the strategies, market trends and financial situation for evaluation, which is followed by the publishing of a rating of credit strength. This year, New York came to Chillicothe with representatives of Moody’s wanting to see Adena’s operations first hand.
“Adena is somewhat of a financial anomaly in today’s health care industry, and the New York-based bond raters wanted to see for themselves what we are doing well to drive our success,” said Chief Financial Officer Lisa Carlson. “They were impressed with our strategic plan, operations and financial performance. Reaffirming an A3 rating with a stable outlook speaks to our strong performance since 2017. It also confirms that we are strategically headed in the right direction for continued success.”
The rating issued is closely watched by investors and potential investors; and is similar to an individual’s credit score. In a news release announcing the rating and outlook, Moody’s states, “The A3 rating reflects Moody’s view that Adena Health will show solid revenue growth as management’s strategy of targeted physician recruitment will continue to capture volumes. We expect Adena will maintain solid operating margins, while newly-recruited physicians ramp up volumes and the system expands its footprint throughout the region.”
The stable outlook reflects Moody’s view that, “Adena will maintain solid operating cash flow margins while sustaining solid revenue growth,” the report said. “The outlook reflects Moody’s expectation that Adena will strengthen its leading market position in the system’s broad nine-county service area.”
“While it’s common for an organization to adopt new strategies each year, we are maintaining our focus on giving our patients the health care services they need, close to home,” said President and CEO Jeff Graham. “Through partnerships with other independent health care providers and businesses in the region, and by recruiting physicians to serve patients across our nine-county service area, we expect to continue to see positive results with a high quality of patient care and satisfaction.”
According to the Moody’s report, Adena’s key strengths are: it’s multi-year trend of strengthened margins; considerable enterprise growth; further growth in liquidity and debt coverage; and the continued trend of management stability and execution of strategies. Moody’s listed Adena’s most pronounced challenge coming from the demographics of the region that includes a large number of governmental payers that could limit improvements in margin.
To learn more about Adena and its services, visit www.adena.org.