DALLAS — Fitch Ratings downgraded $36.3 million of hospital revenue bonds issued for Great Plains Regional Medical Center by the Oklahoma Development Finance Authority to BB from BB-plus on May 6, citing declining cash flow "with no expectation of significant improvement in profitability over the near term."
The Elk City hospital in western Oklahoma has struggled to keep its medical staff full and operated with interim management until finding replacements in top positions last year and this year, according to analysts.
"Fitch believes stability in the leadership team is essential, as continued erosion in clinical activity has required quick strategic action on their part to bring much-needed stability to the organization," said analyst Emily E. Wadhwani.
The debt, issued in 2007, was used to finance a new hospital that was completed in 2009. Fitch rated the medical center at investment-grade BBB in 2011.
Standard & Poor's downgraded the medical center to BB from BB-plus on March 28, keeping the outlook negative. Fitch returned its outlook to stable.
"The negative outlook reflects our view of the uncertainty around whether GPRMC can successfully address its operating challenges over the next one to two years, especially given the trend of declining business volume and physician turnover," said S&P analyst Stephen Infranco.
As the trade center for Western Oklahoma and the Texas Panhandle, Elk City touts itself as the "natural gas capital of the world." Elk City has had a nearly 3% growth in jobs since the 2000 census.
