JOHNSON CITY, Tenn., April 26, 2018 (GLOBE NEWSWIRE) -- S&P Global ratings this week issued its first credit rating report on Ballad Health, citing the newly created system for a “strong strategic vision,” alignment of “best practices” for integration, and the strength of the management team, as the agency granted the highest credit ratings issued for a health system in the region in nearly two decades. The rating agency issued an “A-” rating with a stable outlook.
This higher credit rating is notable, in part, because S&P in January, 2018 predicted that, nationally, “ratings downgrades – which exceeded upgrades in 2017 for the first time since 2014 – are expected to grow in 2018 for organizations already under pressure.”[1] The merger between Mountain States Health Alliance and Wellmont Health System, which was completed February 1, 2018, and which was first announced in April, 2015, was designed to preserve local healthcare access in the Northeast Tennessee and Southwest Virginia region in the face of this external pressure being experienced by the nonprofit hospital sector.
While citing the “complexities associated with the COPA and cooperative agreement” as a complicating factor for integration of the two systems, which resulted in a “negative holistic adjustment,” S&P nevertheless opined that the integration is proceeding well.
“In our opinion, Ballad Health has an experienced management team that has taken a proactive and purposeful approach to the merger that includes developing a strong strategic vision, setting explicit financial and non-financial goals, aligning executive and functional leadership, integrating cultures and leveraging integration best practices," said the rating agency.
“We believe the integration is working because management is working collaboratively with proper state supervision, and the states have been working with us to address issues as they arise,” said Alan Levine, board chairman and chief executive officer of Ballad Health. “We appreciate the manner in which the staff of the departments of health and attorneys general have approached their roles, and we believe this has been a contributing factor for how the rating agency has viewed the COPA and cooperative agreement.”
While noting the challenging operating environment, difficult payor mix and the complexities of the COPA and cooperative agreement issued by the states of Tennessee and Virginia, S&P noted that “there are many benefits” of the merger, “such as the ability to expand the scope of services by providing more efficient and quality care and meaningful cost savings, among other things.”
S&P praised Ballad Health’s commitment to investing in a common health technology platform, recognizing the benefit of such a platform for the geographic region and Ballad Health’s patient population.
“We are grateful to S&P Global Ratings for their objective review of our new health system, and for assigning a higher credit rating than either Wellmont or Mountain States has achieved separately in nearly 20 years,” added Levine. “With the oversight of an incredibly strong board of directors, our team of compassionate and skilled caregivers continues to deliver high-quality care across the region, often recognized as some of the best in America. This credit rating is evidence that the creation of Ballad Health was the right thing to do to help reduce costs, improve quality and sustain our local communities’ leadership of our healthcare resources.”
“Our board is pleased with the progress we have made in integrating Wellmont and Mountain States, and we are more convinced now than ever that this merger was the right thing to do for our region,” said David Lester, lead independent director of the board. “S&P has affirmed our vision and our integration execution, so now we move forward with the sole purpose of providing the best quality care and improving the health of our communities.”
In validation of Ballad Health’s vision, S&P stated, “we believe the contiguous geography now present in the combined system will benefit the organization as the healthcare industry continues to move toward population health management. In our opinion, the first phase of the merger went smoothly.”
“This upgrade is amazing,” said William Greene, founder of Bank of Tennessee and a vocal advocate for the merger. “By itself, it will help save millions of dollars that can now be used to reduce the cost of healthcare and invest in better health for our community.”
About Ballad Health:
Ballad Health is an integrated healthcare delivery system serving 29 counties of Northeast Tennessee, Southwest Virginia, Northwestern North Carolina and Southeastern Kentucky. Ballad Health was created in 2018 to improve the health of people in these regions. Ballad Health operates a family of 21 hospitals in Northeast Tennessee and Southwest Virginia, including three tertiary medical centers, a dedicated children’s hospital, several community hospitals, three critical access hospitals, a behavioral health hospital, an addiction treatment facility, long-term care facilities, home care and hospice services, retail pharmacies, outpatient services and a comprehensive medical management corporation. Learn more about Ballad Health at www.balladhealth.org.
[1] Beckershospitalreview.com, January 11, 2018, “S&P: Outlook is stable for nonprofit hospitals”, Ayla Ellison
Contact:
Taylor Hamilton
Ballad Health Marketing & Communications
taylor.hamilton@balladhealth.org
239-297-7959
A PDF accompanying this announcement is available at: http://resource.globenewswire.com/Resource/Download/25b88be9-349f-40f4-8091-91fec4bf4e1a
