FLINT — The upgrade to BBB from BB++ reflects Hurley Medical Center’s dramatically improved operating performance since Fitch’s last rating action. Hurley Medical Center last received BB+- investment grade rating status in 2006.
Key rating drivers include sharp improvement in liquidity, challenging payor mix, manageable debt profile. Hurley’s liquidity position improved sharply in 2015 with several key liquidity metrics that now meet or exceed Fitch’s BBB category medians. Liquidity improvement has been driven by higher earnings, positive governmental payment adjustments and moderating capital spending. In addition, improvements in revenue cycle noticeably reduced accounts receivable balances.
“As an essential academic premier medical center, Hurley Medical Center is consistently working to transform the health and wellness of our residents in the greater Genesee County communities to improve overall health status. Our new Children’s Center located in the Flint Farmers’ Market and our Hurley Wellness Hub in that same facility are just a few ways we are continuously reaching beyond the walls of Hurley to increase access to care, provide information and outreach, and increase disease prevention. This upgraded rating status and our ongoing dedication to physician and patient collaboration have contributed to Hurley’s improved outlook overall,” adds Melany Gavulic, RN, MBA, President and Chief Executive Officer, Hurley Medical Center.
Operating performance improved dramatically in fiscal 2015 as Hurley posted a 6.1 percent operating margin, or $25.4 million in FY2015; this is the second year with positive operating margins since FY2010. The improved operating performance reflects strong volumes, lower bad debt expenses, management dedication to move care to lower-cost, more convenient settings, and tightly managed expenses.
Hurley’s most recent large capital project was the expansion of our ED to account for high volumes that could not be accommodated in the former space. This project has been successful on many fronts and the expansion and redesign allowed for better patient flow, operating efficiencies and improved patient care. — G.G.