Ordinarily, the mere fact that a provider's bond rating isn't falling like a stone isn't much of a news flash. But in today's economy, it's always worth a quick note when healthcare leaders manage to stay on their feet and keep their bond ratings intact, despite many of their fellows having far less luck.
With the Cleveland Clinic reporting increases in operating margins for the first six months of the year, Standard & Poor's has rewarded it with stable financial ratings. That's in sharp contrast to the rest of the non-profit hospital industry, which has seen three straight years of falling volume, rising levels of bad debt and inadequate access to credit.
For the first six months of 2009, the Clinic had an operating margin of 7.9 percent, versus 4.6 percent for fiscal 2008, according to a recent report from S&P.
It pulled this trick off both by cutting expenses and increasing income. On the one hand, it cracked down on travel, and stopped filling nonessential open positions. Meanwhile, it expanded doctors' schedules to raise patient volume; by doing so, it managed to keep inpatient admissions table at around 142,000 annually.
The Clinic recently floated an $800 million bond issue, $300 million of which will be used to refinance its old debt. The rest will be used for new construction, execs said.
To learn more about Cleveland Clinic's finances:
- read this Cleveland Plain Dealer piece
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