Not-for-profit healthcare

A stronger 2021 aided hospital balance sheets for those whose fiscal years end on June 30 based on a review of hospital operating medians

One public hospital district violated a debt service covenant and was downgraded to junk; the other declared a fiscal emergency and seeks an outside partner.

The state's flagship university said its proposal to acquire its healthcare facilities from Fairview, which is preparing to merge with an out-of-state healthcare system, requires state help.

Moody's and S&P also warn of the potential for further downgrades; UC Health has begun to implement financial turnaround strategies amid operating losses.

Mergers and acquisition dropped to 55 last year from 73 in 2021, continuing on a downward course since 2017, according to a review published by Ponder & Co.

Moody's lowered Fairview Health Services by one notch to Baa1 and assigned a negative outlook, but a pending merger and expected sale of some facilities could help its bottom line.

Hospital margins ticked up in November, but 2022's bruising will linger well into this year straining some ratings.

The action affects about $312 million of debt. The outlook, previously positive, is stable at the new, higher rating.

Attacks pose acute financial threats and longer term reputational and legal risks, analysts said.

Moody's dropped Sparrow Health's rating a notch as it's not yet factoring in the financial and operational benefits of its acquisition by UM Health, which won't extent to a debt guarantee.