Erlanger has received a favorable updated rating from Fitch Ratings Inc., an important financial ratings company. Fitch Ratings has upgraded to BBB+ from BBB the Bond and Issuer Default ratings for Erlanger and assigned a “Stable Rating Outlook” for the direction of the health system. The rating is indicative of the agency’s belief that Erlanger and leadership are making good financial and business decisions for the growth and sustainability of the health system.
According to Fitch Ratings, the upgrade to ‘BBB+’ reflects improved financial performance which began in FY 2020 and continued through FY 2022. In particular, Fitch notes strengthened operations and improved liquidity as a result of fiscal discipline under the prior leadership and commitment from new leadership. The focus on margin improvement and cash growth produced strong operating results.
“The Erlanger team’s dedication to the vitality of the health system is evident through their determination to continuously improve Erlanger in all aspects, including quality and safety for overall care and patient experience as well as being good stewards of our resources,” said Jim Coleman, president and CEO of Erlanger Health System. “I am very proud of this team and their passion for doing everything possible to ensure Erlanger can continue to fulfill its mission for years to come.”
Fitch Ratings also noted the upgrade and “Stable Outlook” are supported by Erlanger’s leading market share in a demographically attractive market. Approximately 50 percent of the system’s discharged patients originate from the primary service area of Hamilton County, 30 percent of patients originate from the surrounding 12 counties. The service area has a strong demographic profile with solid population and economic growth, and low unemployment levels compared to other markets across the state and country. Additionally, Fitch Ratings believes Erlanger is well positioned as a regional referral center providing a significant percentage of very high acuity care, including the only Level I Trauma Center, high-risk obstetrics, Level IV NICU, pediatric hospital, transplant and other services.
Erlanger Chief Financial Officer Lynn DeJaco said, “Erlanger clearly has a great story to tell highlighting the important services this team provides to the community. The rating upgrade is a positive sign that leadership is on the right path, continuing its strong momentum and sending important signals to the market.”