Three Must-Haves for Every Rating Presentation
How you tell the story of your organization is as important as the story itself. Paying attention to three key themes will help ensure that your best voice is being heard in rating committee.
Credit and Capital Markets Outlook for 2024
There was a general improvement in operating margins over the course of 2023, and it is possible that we have reached a point of stability. But with margins still well below pre-pandemic levels, will that level of stability provide sustainability?
5 Key Takeaways from Healthcare Rating Activity in 2023
The past year saw a material increase in downgrades over 2022 while the number of upgrades declined from the prior year. Here are five key takeaways from rating activity in 2023.
Executive Intelligence and Its Relationship to Management Competence
The concepts of fluid and crystallized intelligence explored by Arthur Brooks in his new book, “From Strength to Strength,” offer a new way for health system leaders to look at their executive team and find the proper balance between different types of intelligence.
Thoughts from Ken Kaufman
Rating Agency Update: Covenants, Capital Spending, Consolidation, and Labor
Representatives from Fitch, Moody’s, and S&P Global joined us at the 2023 Healthcare Leadership Conference to discuss the impact of issues ranging from labor to consolidation to financial performance on not-for-profit hospital and health system credit ratings.
Three Things Board Members Should Know When Attending Rating Agency Meetings
How can board members play a helpful role in rating agency meetings if they are invited to attend? Here are three ways in which board members can add value to the rating presentation.
Is Now the Time to Terminate Legacy Interest Rate Hedges?
A changing interest rate environment has reopened the opportunity to consider terminating an organization’s swap position. Organizations should take a measured approach in determining whether this is an opportunity they wish to pursue.
Uncertainty Regarding Covenant Compliance Continues
Responses to Kaufman Hall’s 2023 “State of Healthcare Performance Improvement” report indicate ongoing concern regarding covenant challenges in 2024. Organizations need to understand the causes of covenant misses and near misses and build a durable financial plan for the future.
Revisiting Counterparty Risk
Counterparty risk management must be continually reinforced by implementing and following best practices. This process can help form a stronger and more diverse network of banking partners that will serve an organization well throughout its business cycle.
The Balance Sheet Buffer
Balance sheet strength has buffered consumers and businesses from some of the restrictive shock of higher rates. With a relatively brittle revenue model in healthcare, the focus becomes whether, when, and how to restructure operations as balance sheets are spent down.
Downgrades and the Rating Sword of Damocles
The number of not-for-profit hospital rating downgrades has escalated in 2023, suggesting that benefit of the doubt is running out. Hospitals will need to go the extra mile when preparing material for their rating agency meetings.