DALLAS - Moody's Investors Service has placed Texas Health Resources on its "developing" watch list after its Dallas hospital mishandled the nation's first case of Ebola, allowing it to spread to two nurses.
"The revision of the outlook to developing from positive reflects a high degree of uncertainty about Texas Health Resources' financial performance after the Ebola-related situations at one of the system's flagship hospitals," Moody's analyst Lisa Goldstein wrote in an Oct. 17 report.
"These events may result in operational and reputational impairment, which may be either short or long term," Goldstein added. "At this time, the impact on the system's otherwise positive fiscal position cannot be known."
Texas Health Presbyterian Hospital Dallas, which represents 17% of the network's revenues, initially failed to recognize Ebola symptoms in Thomas Eric Duncan, a Liberian man who came to the hospital on Sept. 25. Three days later, he was admitted to the hospital, where he later died.
Since then, two nurses involved in his treatment have tested positive for Ebola. One of the nurses, Amber Vinson, was allowed to travel to Cleveland, where she interacted with a number of people.
The hospital, one the largest and most highly regarded in Dallas, has admitted that it did not train its staff on how to handle potential Ebola-infected patients.
"Unfortunately, in our initial treatment of Mr. Duncan, despite our best intentions and a highly skilled medical team, we made mistakes," Dr. Daniel Varga, chief clinical officer for Texas Health Resources said.
With a Moody's rating of Aa3, Texas Health Network has about $1 billion of debt outstanding.
"A longer-term disruption in financial performance or significant financial stress, including a permanent reduction in volumes, damage to the brand, or liabilities in excess of insurance may result in negative rating pressure," Goldstein write.
"This event is also a material distraction for management and will consume resources that would otherwise be devoted to growing the enterprise," she wrote. "Moody's analysis will examine patient volume and census trends, malpractice and other insurance levels and updated liquidity information."
Texas Health Presbyterian Hospital Dallas is one of 14 wholly-owned hospitals and is separately incorporated. It is the second largest facility in the system after Texas Health Harris Methodist Hospital Fort Worth, which accounts for 19% of revenues.
Also on Friday, Texas Gov. Rick Perry announced the first recommendations issued by the Texas Task Force on Infectious Disease Preparedness and Response. Perry created the task force, headed by Dr. Brett P. Giroir, earlier this month to assess the state's readiness and ability to respond to Ebola and other infectious diseases.
Perry called on President Obama to enact a travel ban to West African nations such as Liberia where Ebola has killed thousands of people.
"The Task Force is providing technical recommendations to the operational teams responsible for the Ebola response in Dallas, on topics ranging from decontamination to options for experimental therapeutics," said Giroir, director of the Task Force and CEO of Texas A&M Health Science Center. "We are committed to communicating lessons learned, and in turn recommending actions that will ensure Texans' safety and resilience."
Dallas Area Rapid Transit also reported that two of its employees came into contact with persons later identified as having the disease.
One of the employees is a bus driver who told DART management of being a passenger on the plane from Cleveland with the infected nurse Amber Vinson.
"Although the operator was not displaying symptoms at the time, and based on CDC (Centers for Disease Control) information would not be able to transmit the virus, we will attempt to contact customers who were on the bus during his shift," DART said. "The bus he was operating was immediately removed from service for cleaning."
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Corrected October 20, 2014 at 11:02AM: An earlier version gave the wrong name of the infected nurse.