While the facility may enjoy its exquisite credit rating in part due to its status as a county hospital, the fact still remains: Parkland Health & Hospital System in Dallas is the only AAA-rated hospital in the country. It's a pretty remarkable feat in today's world, but admirable even when the economy isn't still suffering.
Parkland CFO John Dragovits notes that the hospital's status is largely based on the outstanding credit rating held by Dallas County, though its own strong performance has certainly played a role. Dallas County has had a AAA rating for 30 years. Without Dallas County, it's not clear whether firms like Standard & Poor's would have taken it seriously, Dragovits says. He believes that ratings agencies actually discount ratings for hospital districts a bit just because of the business they're in.
Parkland, a 685-bed facility, has not only done well financially, it's been in the position to spend. The hospital has been working on a $1.27 billion construction project over the past two years, including a replacement hospital and outpatient center.
It's been able to do so not only because it has strong credit, but because the community has rallied around it. County voters approved $705 million in general obligation bonds late last year to pay for its new hospital, and agreed to a property tax increase of up to two-and-a-half cents per $100 of taxable value to pay for debt service.
About $680 million of the $705 million is being financed through the new Build America Bonds program, a new option made available through the stimulus package. Under the BAB, the federal government is going to subsidize 35 percent of the interest payment, saving $60 million to $80 million over the life of the debt, Dragovits projects.
To learn more about Parkland's financial status:
- read this Health Leaders Media piece