DALLAS — Moody's Investors Service placed the University Medical Center Corp., Ariz.'s Baa1 rating on review for downgrade after the Tucson nonprofit posted a large operating loss in the first nine months of its fiscal year.
The corporation operates the University of Arizona Medical Center, which includes two teaching hospitals for the university's medical school in Tucson. The corporation has about $341 million of debt outstanding, according to Moody's.
The medical center's operating margins were affected by conversion to a new information technology system, the expansion of Medicaid and other new insurance practices, Moody's analyst Daniel Steingart reported on June 10.
"Our review will focus on the organization's FY 2015 budget and timing for improvement in cash flow and liquidity metrics," Steingart said.
According to a June 13 report in the Arizona Daily Star, the University of Arizona Health Network is considering an affiliation with Phoenix-based Banner Health.
Asked about an internal email about a meeting to discuss the alignment, a UA Health Network spokeswoman told the Star via email that the network is in "ongoing discussions with numerous health systems, including Banner."
Banner Health is Arizona's largest health system with 16 Arizona hospitals. Officials declined to confirm the talks but told the Star that the system is frequently asked to partner with other systems.
The UA Health Network was created in 2010 through a merger between University Medical Center Corp. and University Physicians Healthcare.
