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Overlake Hospital receives increase in financial rating from Standard and Poor's
Representatives of Overlake Hospital Medical Center announced Tuesday the Center had earned a financial ratings increase from Standard and Poor's Rating Service. The hospital went from an "A-" to an "A" rating.
Financial ratings for not-for-profit hospitals like Overlake indicate the organizations' ability to pay back debt on credit financing, taking into account expenses, revenues and evidence of continued future stability. Not-for-profit hospitals across the United States faced expense growth that outpaced revenue growth in fiscal year 2013, according to an April report from Moody's.
The S&P report noted Overlake's successful completion of an electronic medical record conversion, and credited management as having "consistently delivered on results" and showing "detailed consideration to future planning."
"We … are extremely pleased with our solid financial performance," Overlake Chief Financial Officer Gary McLaughlin said in a prepared statement. "Hospitals and healthcare providers across the country face continued financial pressure to keep pace with needed infrastructure investment, regulatory pressures and declining reimbursement for services. Receiving this increase is a powerful statement about Overlake's financial health and management."
McLaughlin and freshman Overlake CEO J. Michael Marsh presented for both S&P and Moody's in San Francisco in May.
Moody's currently rates the hospital as "A2" with a stable outlook for the future. A2 is the sixth highest rating Moody's gives, describing an "upper-medium" investment grade organization of low credit risk.
Standard and Poor's "A" rating is equivalent to Moody's A2 rating, indicating the organization has "strong capacity to meet financial commitments, but (is) somewhat susceptible to adverse economic conditions and changes in circumstance," according to the ratings agency's website.
The ratings upgrade is the sixth earned by Overlake over its operating life.