The system's solid business position characterized by good market share in a demographically favorable region that is largely dominated by two health care systems that have recently become more collaborative.
Kingsport, TN (Vocus) August 26, 2009
Standard & Poor's Rating Services has upgraded its outlook for Wellmont Health System to stable, citing the health system's "improving financial metrics" and "better-than-expected operating performance."
In addition to revising its outlook for Wellmont to stable from negative, S&P has also affirmed the health system's BBB+ credit rating.
S&P analysts said the upgraded outlook is supported by operating improvements that generated $6.5 million in operating income (unaudited) for fiscal 2009.
"This positive report from S&P is the result of hard work and commitment by our employees, physicians, board members and leadership team," said Mike Snow, Wellmont's president and CEO. "Their commitment and dedication are making the difference for our hospitals as we continue to face the challenges of a weakened economy and the uncertainty of healthcare reform."
The S&P ratings report states that Wellmont's operational improvements have not only led to current financial improvements but also bode well for future performance as well.
"The return to a stable outlook reflects our increased comfort that Wellmont has identified and corrected the accounting issues that led to the restated 2007 results and the 2008 audit delay," the report states. "Additionally, while current economic conditions, and the uncertainty whether limits on future Medicare, TennCare and Virginia Medicaid reimbursement may constrain operations, we believe that management initiatives to reduce costs and improve Wellmont's revenue cycle will support a generally improving operating trend."
Other factors S&P cited in upgrading Wellmont's financial outlook include:
- "The system's solid business position characterized by good market share in a demographically favorable region that is largely dominated by two health care systems that have recently become more collaborative."
- Acceptable maximum annual debt service coverage, despite the economic downturn that affected investment income for organizations throughout the country. Wellmont's debt service coverage "remained consistent with prior years, despite the significant decline of investment income and other non-operating revenues in fiscal 2009."
- A stabilized balance sheet that includes 131 days cash on hand.
Wellmont Health System is a leading provider of healthcare services for Northeast Tennessee and Southwest Virginia, delivering top-quality, comprehensive healthcare and wellness services across the region. Wellmont facilities include Holston Valley Medical Center in Kingsport, Tenn.; Bristol Regional Medical Center in Bristol, Tenn.; Mountain View Regional Medical Center in Norton, Va.; Lee Regional Medical Center in Pennington Gap, Va.; Lonesome Pine Hospital in Big Stone Gap, Va.; Hawkins County Memorial Hospital in Rogersville, Tenn.; and Hancock County Hospital in Sneedville, Tenn. Wellmont is an operating partner with Adventist Health System at Takoma Regional Hospital in Greeneville, Tenn. For more information about Wellmont, please visit http://www.wellmont.org.