CHICAGO -- Moody's Investors Service said May 9 that it has placed Henry Ford Health System's A2 rating on review for possible downgrade due to a continued decline in operating performance.
Henry Ford is one of Michigan's largest providers and one of Detroit's top employers. It has five hospitals and more than 23,000 employees. The system has $831 million of outstanding debt issued through the Michigan State Hospital Finance Authority, according to Moody's.
"The rating is placed under review for possible downgrade with an unexpected continued decline in already low operating cash flow generation that weakened debt coverage measures," Moody's said in its report. "Pressures are expected to continue in 2014 with an estimated increase in pension funding and the establishment of fees to be paid by health insurers under the [Affordable Care Act]."
Other pressures include a struggling local economy and declining admissions, according to Moody's.
The ratings agency last downgraded the system in December 2012, pushing its rating to A2 from A1.
Henry Ford in 2012 was poised to merge with another Detroit-area health care giant, Beaumont Health System, in a $6.6 billion deal. But the merger was called off in March 2013, with officials citing "cultural differences."
