Agencies praise strong strategic vision, best practices, strength of management
JOHNSON CITY, Tenn., April 26, 2018 (GLOBE NEWSWIRE) -- Today, Fitch Ratings joined S&P Global Ratings in upgrading the credit ratings for Ballad Health. Fitch increased the credit rating by two categories to a solid “A” rating with a stable outlook, bypassing the A- rating. Moody’s affirmed its ratings and outlook.
Together, the three rating agencies cited a variety of strengths of Ballad Health that led to the upgrades and affirmation. Citing the strength and experience of the management team, historical disciplined financial management, a strong strategic vision and a solid plan for refinancing that will lead to immediate reductions in debt service, the nation’s three leading rating agencies applauded the potential for the merger between Wellmont Health System and Mountain States Health Alliance to produce outstanding results.
“The upgrade by Fitch to a solid A rating means Ballad Health is a high credit quality, and that holders of our debt can have a high degree of confidence that the board and management will do what we say we will do,” said Alan Levine, chairman and chief executive officer of Ballad Health. “The integrity of our organization is important to us, and good financial stewardship should give confidence to our communities, team members and physicians that we are on the right path.”
While each agency cited the “complexities associated with the COPA and cooperative agreement” as a negative risk related to integration of the two systems, the agencies each also acknowledged management has provided examples of collaboration with the states that helped mitigate the risk. Notwithstanding the uniqueness of the COPA and cooperative agreement, the agencies believe management will be able to execute on the synergies and investments required for success.
“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 S&P Global Ratings.
“Our state leaders know how important the success of this merger is for the region,” added Levine. “They want it to work, and at the same time, they have a responsibility to ensure the elimination of competition doesn’t harm consumers. We are very sensitive to this as well, as we are a community-based system. Our board members live here and take personal responsibility for making sure we add value. Each of them is committed to making sure Ballad Health acts with integrity. In fact, the first thing they did as a board was approve a code of conduct that all Ballad Health team members must agree to follow.”
“We are glad the independent rating agencies see the value in what we have created for our region,” said Levine.
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, the agencies noted “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 also 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.
“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 health care industry continues to move toward population health management. In our opinion, the first phase of the merger went smoothly.”
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.
Contact:
Taylor Hamilton
Ballad Health Marketing & Communications
taylor.hamilton@balladhealth.org
239-297-7959