Bond Ratings and Disclosures
UPMC’s close attention to quality and costs has yielded tangible returns in the financial markets, as reflected in our credit ratings from all three major rating agencies, Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s (S&P).
Moody's
On March 31, 2011, Moody’s affirmed its ‘Aa3’ long-term rating on UPMC’s outstanding tax-exempt bonds and changed its Rating Outlook from Stable to Positive. Moody’s revision of their Rating Outlook to Positive reflects UPMC’s leading market position in Western Pennsylvania and strong patient demand, preeminent clinical reputation rooted in tertiary and quaternary clinical campuses throughout the greater Pittsburgh area and a large network of well-positioned community hospitals, good operating margins and a long track record of effectively addressing operating challenges.
Moody’s cited a number of factors supporting its ‘Aa3’ rating of UPMC, including:
- Preeminent clinical reputation and wide patient draw regionally and nationally;
- unrivaled business platform in 29-county service area capturing over 33% market share and a dominant 55.7% market share of Allegheny County
- Mature and successful integrated delivery system model with all divisions meeting financial and strategic imperatives
- Strong management capabilities evidenced by the organization's ability to absorb operating challenges and continue to grow absolute operating cashflow levels in each of the last three years
- Substantial patient demand well secured by the geographic diversity of hospitals, ambulatory surgery centers, cancer centers, an array of post-acute care settings, insurance products and a formidable physician network
Fitch Ratings
On February 9, 2010, UPMC received an affirmation of its ‘AA-‘ long-term credit rating from Fitch Ratings, with a change in its Rating Outlook from Negative to Stable. Fitch cited an improvement in operating performance, efforts to reduce exposure to interest rate volatility, recovery in the value of its investment portfolio, the dismissal of the West Penn Allegheny Health System’s antitrust case and the divestiture of nonperforming assets as its reasons for the revision in the Outlook.
Fitch Ratings continues to credit UPMC’s dominant market share presence, strong management practices and strong quality indicators; UPMC’s place on US News and World Report's Honor Roll as one of “America's Best” Hospitals for 11 years in a row; and UPMC as a model for best practices in its operations, with its use of information technology as a tool to monitor operations, enhance productivity and efficiency, sustain operational improvement, and transfer knowledge and best practices throughout its network for its ‘AA-‘ rating.
Standard & Poor’s
On February 8, 2010, Standard & Poor’s (S&P) affirmed UPMC’s long-term rating of ’A+’ with a Stable outlook. This rating reflects UPMC’s very strong business position as an integrated regional delivery system based in Pittsburgh, with a dominant business position in Allegheny County; a solid position in a large, 29-county area in western Pennsylvania; and a close relationship with our academic partner, the University of Pittsburgh.
S&P cited the following factors supporting its rating:
- Continued market share growth within its large western Pennsylvania service area, ongoing capital investments, a strong reputation, brand-name recognition, several highly visible subsidiary facilities, and comprehensive service offerings, including women's, children's, cancer, rehabilitation, behavioral health, and transplant services
- Sizable and diverse footprint in western Pennsylvania, a large complement of employed physicians, and a health plan with more than 1.4 million covered lives
- Sound management team, which has kept UPMC very well positioned within its market as the region's dominant provider, demonstrating the ability to divest nonperforming assets when needed, and developing several nontraditional service lines, including the UPMC Health Plan
- Management's demonstrated strong commitment to implementing leading-edge information technology and financial control systems