WVU Medicine receives strong financial ratings from S&P, Moody's

S&P assigned its “A” long-term rating to the health care system’s $262.3 million Series 2023A bonds.

Moody’s assigned an “A2” designation to the system’s proposed Hospital Revenue Improvement Bonds 2023 Series A, which soon will be issued as fixed-rate, tax-exempt securities for about $285 million.

WVU Medicine President and CEO Albert Wright and other officials met with both rating agencies recently, outlining the system’s financial footing and planned bond sales.

Wright said the strong bond ratings show the system’s stability and allow them to receive the best interest rates.

“We’ve got a number of construction projects going on in Morgantown, in Jackson County and Fairmont,” Wright said.

The WVU Medicine system is “different than a lot of healthcare systems around the country,” in that “we’re still expanding and growing,” he said.

“We’re in an interesting situation because the entire healthcare industry has been financially challenged over the last few years with all of the COVID shutdowns and temporary labor (issues),” Wright said. “We — ‘knock on wood’ — at WVU Medicine have been able to weather that storm and stay profitable. We’re taking care of more patients than ever. So we’re meeting our mission.

“... So we’re growing in our major academic campus here in Morgantown. We just acquired Thomas Health System down in Charleston and Princeton Community Hospital down in Princeton.”

Wright emphasized that as the system grows and invests in new buildings, equipment and staff, they want to make sure they are doing so in the most fiscally prudent manner.

“We want to make sure that we keep our good credit ratings,” Wright said, noting other systems in the state and nation have seen their status downgraded.

Wright said the system has followed the strategy of its “growth of meeting our mission of improving the health trajectory of West Virginia, of taking care of as many West Virginians as possible,” in the most fiscally responsible way.

Both rating agencies had positive comments for the health system’s financial management.

S&P rated WVU Medicine’s Enterprise Profile and Financial Profile as “Strong,” noting that its bond rating “also reflects WVUHS’ continued growth and expansion, including through construction and acquisition, widening its primary service area.”

It also noted the system’s “growing position as the state’s largest health care system with material coverage within the state of West Virginia as well as reach in Ohio, Pennsylvania and Maryland, with its flagship, West Virginia University Hospital (WVUH), playing a dual role as the primary academic medical center and safety net provider in the state.”

The agency noted “positive solid operating margins despite headwinds over the past several years throughout the pandemic,” and said the system had a “manageable amount of contingent liabilities and limited pension liabilities.”

Moody’s said its rating “reflects WVUHS’ history of steady performance and demonstrated ability to achieve solid operating margins and successfully integrate new system members. This track record and continued enterprise growth will support the absorption of the proposed new debt, despite challenging industry-wide conditions.”

The agency also noted that the health care system that operates under the trademark of WVU Medicine “will continue to benefit from a very strong market position, anchored by its sizable academic medical center that is closely aligned with West Virginia University School of Medicine as well as its recently opened children’s hospital.”

Moody’s also said the system’s “market position and solid clinical demand will also be supported by its growing network of community and critical access hospitals throughout West Virginia and surrounding state.”

Wright said the ratings were “a big compliment to our leadership team” and its “laser focus” on making sure the system remains fiscally responsible and thus able to invest in providing high-quality health care while investing in the communities they serve.

He said the system will continue to look at improving current facilities throughout the system while looking for new opportunities for growth, helping to bring more high-quality health care to more areas of the state.