From stable to negative: Midlands hospital battles financial hurdle | News
CAMDEN, SC (WIS)- One rating service's negative outlook on Kershaw
County's hospital does not mean the company is in a downward financial spiral,
according to KershawHealth's CEO Donnie Weeks.
Standard & Poor's took KershawHealth's stable
financial outlook down to a negative mark this week, but did affirm its bond
"The main point is that our bond rating was affirmed,"
Weeks said Friday.
The report outlined the bond affirmation showing the
hospital's "good business position" by acknowledging its cash-on-hand. KershawHealth
has $37 million in unrestricted cash and investments with $133 million in
"We are very, very
strong in our cash position and debt,"
As of Sept. 30, KershawHealth had $21.4 million in
outstanding long-term debt.
Also KershawHealth signed a letter of intent to consider
collaborative efforts with Palmetto Health in Columbia, which contributed to
its affirmed bond rating.
S&P's negative rating came from "KershawHealth's
inconsistent operating results for the past four fiscal years." The report
showed that the hospital has an unaudited $1.85 million operating loss, but at
the year-end could total $3 million. Weeks said the $3 million loss, includes
$1.2 million in interest expense, leaving the operating loss at $1.6 million as
of Dec. 12.
"While we believe management will address the challenges
through cost-saving initiatives, the fiscal 2013 budget still indicates some
continued stress with a slight operating budget," the S&P report stated. "…
Due to current operating pressure, we do not expect to raise the rating within
the two-year outlook period. However, we would consider a positive outlook or
higher rating if KershawHealth can demonstrate sustained improvement in
operations over a multiyear period."
To battle the operating revenue loss, Weeks said the
hospital staff cut its operating costs, which specifically came from a reduced
force by attrition. About 100 employees were removed from KershawHealth in the
last four years to end, what Weeks describes as a growing need in a slow
"The major reason is because of the economy," Weeks said.
"We have a lot of people unemployed now, who were not in the past. There are
also others who have a higher deductible or co-pay who can't pay that now."
Other than its 96-bed hospital in Camden, KershawHealth
also has outpatient medical facilities in Lugoff, Elgin and Bethune.
In a report to the KershawHealth Board of Trustees,
Executive Vice President Michael Bunch told members the hospital's board
"inpatient admissions and surgeries were significantly lower than prior year
while bad debts and charity care increased."
"We can weather the challenges, but we have to take the
appropriate actions to do that," Weeks said.
Despite the S&P report, Fitch Ratings just six months
ago gave KershawHealth a stable rating and also affirmed its bond rating.
Copyright 2012 WIS. All rights reserved.
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