Adventist Health gets “A” Rating, positive outlook from Fitch Ratings

Adventist Health—a faith-based, nonprofit integrated health system serving more than 75 communities in California, Oregon and Hawaii—has received a positive outlook review from Fitch Ratings, Inc., one of the world’s leading financial ratings agencies.

Assigning an A grade to Adventist Health’s approximately $930 million in outstanding rated debt, Fitch is confident the health system will continue to see strong margins as it works toward its 2022 goals, Adventis said.

“Adventist Health’s ability to achieve a leading position in acute care in multiple growing markets, coupled with strong cost management and growth over the past several years, has truly been a remarkable journey for us,” said Adventist Health CFO Joe Reppert. “Providing critical care for underserved populations is challenging, but this revised outlook from stable to positive is both a confirmation and recognition of a dedicated, disciplined staff that has worked strategically and tirelessly to do the right thing for our communities.”

Adventis Health noted that, despite the fact that more than 30 percent of the Adventist Health payer mix comes from Medicaid—which presents a credit challenge—Fitch highlighted the significance of the healthcare system’s solid market positions in multiple states. Giving Adventist Health a “mid-range” rating with respect to revenue defensibility, the bond rater attributes the health system’s real strength to the size of its network that includes more than 280 clinics, as well as 19 hospitals positioned throughout California, Pacific Northwest and Hawaii. Fitch also foresees continued good operations and predicts Adventist Health will soon begin generating EBITDA margins of 10 percent to 11 percent—up from 9 percent last year—with continued cost controls that support its growth and capital projections.

“In many of our markets, particularly those in California, Adventist Health is the sole community provider serving largely rural populations,” Reppert adds. “Yet, our market shares have been driven largely because we operate in the space that not many other providers are attempting to operate in, which is something we are extremely proud of and inspired by in these exciting times of change.”

Adventis Health, sign
Image: Adventis Health