Moody’s Investors Service retained Union Hospital of Cecil County’s A3 bond rating on approximately $33.7 million of outstanding rated debt issued by the Maryland Health and Higher Educational Facilities Authority. Moody’s is a top debt rating service.
The outlook remains stable. The rating incorporated the financial performance of the entire Affinity Health Alliance, Inc. and subsidiaries, Union accounts for 79 percent of Affinity assets and 93 percent of Affinity operating revenues.
Moody’s said the rating reflects a stable outlook and reflects its position as the only hospital in Cecil County. Union was also lauded for its operating performance and financial position.
The service noted that Union operates under the Total Patient Revenue system, which provides a strong incentive to control the days of care and other services per admission, a goal of national health reform efforts. Union also has no plans to issue more debt through fiscal 2016.
The hospital has a debt to operating revenue ratio of 56 percent, which is considered “somewhat leveraged,” according to Moody’s. Moody’s also stated it is *small for an A rated hospital ($151 million total operating revenues and just over 6,300 inpatient admissions” in fiscal 2012. recorded in FY 2012). It also relies on a small number of physicians for admissions, as the top ten admitting doctors account for approximately 51 percent of admissions.”
*Medicaid represented nearly 22 percent of revenues, although the service noted that this is less of a concern in Maryland, which has a regulated hospital system.
The report indicated that Union has seen inpatient admissions decline for the fourth consecutive year. This was balanced out by total admissions being up slightly in fiscal 2012.
Union Hospital is in Elkton, Md., a short drive from the Delaware line and the Christiana Hospital complex. However, the county bordering Delaware is large and using other hospital systems is less convenient in other communities.
