Mon Health receives BBB+ bond rating and ‘Stable Outlook’ from Fitch Ratings

Monongalia

Morgantown, W.Va. – Sound financial management practices have once again earned a BBB+ bond rating for Mon Health System from Fitch Ratings, a credit rating agency.

According to Fitch, Mon Health’s outstanding debt outlook looks “stable”. But Mon Health CEO David Goldberg said he thinks it’s “more than stable”. He said Mon health received a BBB+ rating in 2020 right before the pandemic hit, but it weathered the COVID storm.

David Goldberg

They looked at our financials over the last review period to now and continue to see us grow our market share, continue to decrease our overall debt, manage very well in a pandemic with lots of unknowns. And we’re very pleased to see, you know, Mon Health turn around from last year to this year we had a $77 million improvement. Most of it was from our investments and treasury because everyone made money in the stock market. But we reduced our debt. We refinanced some outstanding debt this past year during the pandemic, so our overall financial health continues to be strong. 

When you look at Mon Health System as a whole, Goldberg said, it has grown from about $830 million in revenue three years ago to just about $1.1 billion in gross revenue.

Mon Health is sitting on about $150-$190 million in debt, which needs to be compared to its savings and investments. Goldberg said savings and debts are more than current debt and that Mon Health continues to generate a “significant amount of cash a year” to fund its business.

With all this capital on hand, the health system has been growing. The reason, the chief executive said, is because there has been “significant growth” in different businesses.

“We now manage Grafton City Hospital,” Goldberg said. “We have a clinical affiliation with Minnie Hamilton Health System. We have turned around the performance at Stonewall Jackson Memorial Hospital. We’ve implemented a new electronic medical record here in Morgantown in all of our physician practices. We’ve lived through a pandemic, not that it’s by far over, but we have continued to operate. We have grown our staff, invested in facilities, launched programs, received significant national accolades like our heart program, which is the bellwether of Mon health system to be the 24th Comprehensive Heart Care Center in the country by the American College of Cardiology.”

In addition, Goldberg said, Mon Health is a bariatric center of “excellence” at Preston Memorial Hospital. Both Mon Medical Center and Stonewall Jackson Memorial have a Leapfrog Hospital Safety Grade of ‘A’. Leapfrog, he said, is a third party that reviews all clinical and service outcomes. Therefore, an ‘A’ rating proves that Mon Health is doing well.

Mon Health sign at night

With the present being stable, the next thing to do is to look to the future. Goldberg said he and his team are, already, doing that.

“To us what is the future,” Goldberg asked. “Continue to grow appropriately, continue to focus on service and quality, continue to make sure we’re accessible to all those who need our level of care. We’ll partner with organizations that make sense to bring care closer to home to the communities we serve and to continue to grow our treasury to be sustainable and to be able to be strong.”

The key factor to a successful future for the health system will be managing its debt “appropriately”, the CEO said. Right now, interest rates are low, so it’s cheaper to borrow than to spend its own money.

For example, Mon Marion Neighborhood Hospital took a $15 million mortgage with United Bank to be able to borrow at very low-interest rates rather than using its investments.

“We make money on our investments,” Goldberg said. “We have a low rate of debt and we’re able to balance it in a very conservative, prudent manner like we do with credit cards and mortgage payments.”

The United Bank loan is just one of the outstanding debts, but Goldberg said it demonstrates that Mon Health is being smart and calculated about how it spends its money. Furthermore, he said, it proves that Mon Health System is deserving of its BBB+ rating from Fitch.

“I’m excited about the future,” Goldberg said. “Mon Health continues to move forward. We bring programs and services to the communities that ask for us and need us. I believe it’s important to make access very, very easy for a patient to see their doctor, to get the specialty care that they need. We’re bringing chemotherapy services out to Preston Memorial this year because no patients should have to drive far for cancer services. We’ve brought hard services out to Grafton, out to Stonewall, out to Preston. We’re bringing services to Gilmer County because those people use us, and we’re bringing care closer to home. And we expect this year to be an even better, brighter banner year.”

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