CHICAGO – Ingalls Health System in south suburban Chicago took a rating hit as it ramps up spending on capital and operations in an effort to stem further volume losses and improve its competitive edge.
Moody’s Investors Service lowered the hospital’s rating to Baa2 from Baa1 and assigned a stable outlook.
The hospital has $61.5 million of debt issued in 2013 through the Illinois Finance Authority.
The downgrade “reflects an expectation of modest margins over the next several years as the organization makes considerable investments in physician recruitment and other growth strategies to stabilize declining volume trends,” Moody’s wrote.
The downgrade also incorporates IHS' increasing capital spending to further secure its market position in a competitive service area “which will likely temper liquidity over the next several years,” the rating agency added.
The hospital operates with a modest revenue base in a highly competitive service area and has a high reliance on government reimbursement. The system benefits from a close affiliation with University of Chicago Medical Center that was struck late last year, strong liquidity and a manageable debt load that affords it time “to further strengthen the UCMC relationship and stabilize operating performance.”
Ingalls Memorial Hospital is a 352 staffed bed hospital.
The hospital is in Harvey. In addition to the flagship hospital, IHS has outpatient facilities in the surrounding towns of Tinley Park, South Holland, Calumet City, Flossmoor, and Crestwood.
Following the affiliation, Ingalls Health System changed its name to UCM Community Health and Hospital Division and Affiliates.