Healthcare

Fitch Ratings cited the San Diego-area health district's ongoing fiscal woes in dropping its rating to B-minus from B and revising its negative watch to a negative outlook.

The Federal government's long-term budget challenges could mean dramatic changes for hospitals and health systems nationwide, derailing the post-COVID credit recovery that helped turn the healthcare sector into the fastest-growing segment of the municipal market in 2024.

The San Diego County-based healthcare district is at risk of "breaching financial covenants which, absent lender cooperation, could lead to acceleration of all of Palomar's outstanding revenue debt," Moody's Ratings analysts wrote.

The Bond Buyer's Deal of the Year awards will mark the 23rd year it has recognized outstanding achievement in municipal finance. The event, to be held Dec. 3 in New York City, will also include the presentation of the Freda Johnson Awards for Trailblazing Women in Public Finance.

When Ohio's Community Memorial Hospital shuttered on Aug. 31, it became the latest small-town Midwest hospital to hit insurmountable financial troubles.

While BayCare has meaningful competition, Fitch believes it will maintain or grow its market position given its investment in facilities, expansion of clinical services and continued increase in access points.

The bankruptcy saga of Mercy Hospital continues, with trustee Computershare Trust filing a notice about the distribution of cash to bondholders.

Both ratings agencies cited the health system's improved liquidity in recent years.

Falling occupancy figures, staffing shortages, and rising labor costs have elevated the sector's risk, with Greenwich Investment Management's bankruptcy yet another example of how the sector requires thorough credit analysis.

The number of rural hospitals in the red jumped by 7% in 2023. A Senate Finance Committee discussed aid to help them stay afloat.