Fitch Affirms Wellmont's BBB+ Bond Rating, ?Issues Stable Outlook For Health System
Wellmont Health System continues to show strong fiscal leadership and make vital enhancements to its facilities and operations even as it faces unprecedented changes from healthcare reform.
Fitch Ratings recently affirmed Wellmont's BBB+ bond rating and issued a stable outlook after evaluating the health system's finances. Of particular note was Wellmont's completion of fiscal 2012, which ended June 30, with a 2.8 percent operating margin.
"This figure is an excellent result and reflects the hard work and commitment of everyone in our health system to meet our patients' needs while also keeping a close eye on our expenses," said Denny DeNarvaez, president and CEO. "This is essential because change is coming rapidly to the healthcare landscape that will pose new challenges.
"Our co-workers in Northeast Tennessee and Southwest Virginia are excellent stewards of our financial resources and remain focused on creating an environment that fosters healing and high-quality care for our patients."
In analyzing Wellmont, Fitch noted several positives, including the health system's leading market share in its primary service area. The national company said Wellmont's fiscal 2012 performance was solid for the BBB category.
"The stable outlook reflects Fitch's belief that Wellmont will maintain a level of operating performance to support consistent debt service," Fitch said in its report.
At the end of December, Wellmont had 197.1 days cash on hand.
As a not-for-profit organization, Wellmont's operating margin does not go to stockholders. Rather, the funds are reinvested in the communities Wellmont serves to enhance the level of care patients receive.
Wellmont has recently invested considerable funds in a multiyear, multimillion dollar project to build an electronic health record that will give patients greater access to their health information, create more synergy between them and their caregivers and increase sharing of expertise among physicians.
To accomplish this exciting initiative, Wellmont is utilizing Epic software, which has a proven track record of assisting patients, to advance this cutting-edge technology.
Wellmont has also invested in systems to boost patient care through the implementation of computerized provider order entry, which essentially eliminated hand-written orders that could have been misinterpreted. The health system has also been extensively involved in achieving meaningful use requirements established by the federal government.
Responding to patient requests, Wellmont has continued to add services in the region. As examples, the Wellmont Cancer Institute recently opened an office and added a breast center, both in Johnson City. Meanwhile, the Wellmont CVA Heart Institute has opened several additional offices throughout the region.
Other enhancements include the expansion and renovations of emergency departments at Lee Regional Medical Center and Mountain View Regional Medical Center in Virginia and Hawkins County Memorial Hospital in Tennessee. Wellmont has also added multiple physicians throughout the region.
All of this has been accomplished while the health system has provided about $94 million in community benefit, including about $77 million in uncompensated care. Wellmont will continue to face similar challenges with the uncertainty of expanding the Medicaid rolls in Tennessee and Virginia to compensate for reduced Medicare reimbursements.
"Our region can be proud that its community partner, Wellmont, has been prudent in watching its expenses while continuing to deliver superior health care with compassion," DeNarvaez said. "As we navigate healthcare reform and the obstacles and opportunities that presents, Wellmont will remain guardians of the region's health and continue looking for ways to make the people we are privileged to serve healthier."