Great Plains Regional Medical Center receives A- rating from Standard & Poor’s
North Platte, Neb. Standard & Poor’s Financial Services LLC (S&P), the nation’s leading rating agency recently announced an A- rating with a stable outlook for Great Plains Regional Medical Center’s long-term bond rating.
While the health system received a slight decrease in its rating going from A to A-, hospital officials were pleased with the recent assessment, particularly given the size of its upcoming project.
Ratings are an important factor for investors as they look at making investments in municipal bonds. The higher the rating, the more comfort with the future ability to repay the debt. That translates into lower interest rates. With an A- rating from Standard & Poor’s, many investors will be interested in purchasing the Great Plains Regional Medical Center debt when it is priced in November.
“We’re entering into the largest construction project in the hospital’s history, said Greg Nielsen, Great Plains Regional Medical Center chief executive officer. “The project will transform the landscape of our local medical community, improving overall patient experience, realizing operational efficiencies and ultimately improving the way we deliver health care.”
Bond proceeds will fund the construction of the 116-bed, five-story patient tower which will feature modernized patient units, all private rooms including more space for family members, increased parking and the expansion of the central utility plant.
“This is a very favorable rating outcome. We fully expected that the $100 million project investment would affect our bond rating,” said Krystal Claymore, Great Plains Regional Medical Center chief financial officer. “We were pleased to learn though that our strong financial performance and clear mission and vision helped us achieve the A- rating.
The recent rating puts GPRMC in line or better than other like-size S&P-rated hospitals across the state.
In a written statement to Great Plains Regional Medical Center, S&P attributed their A- rating to the health system’s:
- Strong business position.
- Consistently healthy operating levels (ranging from 4 to 6 percent in the last five years).
- Growing unrestricted reserves, resulting in strong cash on hand (currently at 275 days).
- Successful physician recruitment (an increase of 30 physicians in the last three years).
Great Plains Regional Medical Center has increased its services and medical staff so that it can better serve the local community and grow as a regional referral center, said Claymore. The success of this effort has certainly shown up in volume increases almost across-the-board, she added. Year to date through September 2012, admissions grew by 6 percent, outpatient visits increased 7 percent, emergency visits increased 10 percent and physician visits increased by 46 percent.
According to S&P’s written statement, “The stable outlook reflects our anticipation that Great Plains Regional Medical Center will continue to generate healthy operating margins as a result of its dominant market position, successful physician recruitment and good utilization.”