Chattanooga: Erlanger's Baa2 bond rating affirmed

Chattanooga: Erlanger's Baa2 bond rating affirmed

August 9th, 2013 by Staff Report in Local - Breaking News

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Moody's Investor Services reaffirmed the Erlanger Health System's Baa2 bond rating this week, attributing its assement to a "new dynamic Chief Executive Officer with operational improvement experience at large tertiary academic hospitals" who "will lead the turnaround initiatives."

The comments were made in a detailed report about the hospital and its operations, according to a news release from Erlanger.

The report noted that Erlanger is working toward additional supplemental payments through the Public Hospital Supplemental Payment Pool, a designated pool for safety net hospitals in Tennessee. Erlanger's designation "as a 'safety net' hospital has resulted in annual state-funded essential access payments and new disproportionate share payments, although funding of programs are not guaranteed into the future," analysts stated.

"The affirmation from Moody's is a vote of confidence in our strategies to improve our financial position," Kevin M. Spiegel, FACHE, Erlanger president and CEO, said in the news release. "This is a call to action for all Erlanger associates to move forward with our cost saving initiatives and growth strategies."

Analysts also stated that Erlanger's conservative debt structure and the strong economy of the city, county, and region contributed to Moody's reaffirmation of Erlanger's rating.