CAPE COD HEALTH SYSTEMS 'BBB' REVENUE BONDS AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --
CAPE COD HEALTH SYSTEMS 'BBB' REVENUE BONDS AFFIRMED BY FITCH
-- FITCH FINANCIAL WIRE --
NEW YORK, Nov. 21 /PRNewswire/ -- Cape Cod Health Systems' outstanding $30.9 million 'BBB' series 1990 revenue bonds, issued by the Massachusetts Industrial Finance Agency, are affirmed by Fitch. The credit trend is improving. Credit fundamentals are strong and include the hospital's dominant market position, its Medicare designation as a sole community provider and regional referral center, and young and growing medical staff.
Financial results are notably higher than projected in the 1990 feasibility study. Fiscal year 1990 (ended Sept. 30) represented a financial turnaround which has continued into fiscal year 1991. Historic pro forma maximum annual debt service coverage was a strong 2.48 times in 1990. However, uncertainty exists regarding Massachusetts' hospital reimbursement system, which expired on Oct. 1, with no new regulations in place. In the interim, hospitals are permitted to maintain charges at their Sept. 30 level.
Inpatient utilization has improved significantly, with a 6.6 percent increase in discharges in 1990, and a 5.7 percent increase in the first nine months of fiscal year 1991. Outpatient utilization remains strong.
The obligated group includes the system's two nursing homes, which account for about 10 percent of net revenues of the system. The nursing homes are heavily reliant on funds from Medicaid. Concerns about the nursing home operations include Medicaid rate reductions and payment delays and the need for the hospital to provide working capital to the nursing homes.
/CONTACT: Michele Cebron of Fitch, 212-908-0591/ CO: Cape Cod Health Systems ST: Massachusetts IN: HEA SU: RTG SB -- NY089 -- 6018 11/21/91 15:29 EST