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MCLEAN HOSPITAL (MASS.) $40 MILLION REVENUE BONDS RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

MCLEAN HOSPITAL (MASS.) $40 MILLION REVENUE BONDS RATED 'A' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Feb. 21 /PRNewswire/ -- The Massachusetts Health and Educational Facilities Authority's $40 million revenue bonds, Series C, issued for the McLean Hospital, are rated 'A' by Fitch. The credit trend is stable. Bond proceeds will be used to refund the hospital's Series B issue (outstanding $27.7 million), and to reimburse the hospital for prior capital expenditures.
 McLean Hospital has a national reputation as a tertiary referral psychiatric hospital. The 273-staffed bed hospital is a teaching affiliate of the Harvard Medical School and receives more research grant funding than any other private psychiatric hospital in the country.
 In addition to the hospital's national reputation, the rating is supported by McLean's steady financial performance, strong utilization results, and solid cash flow. The debt load is manageable with maximum annual debt service (MADS) at 5 percent of total 1991 revenues. Historical pro forma coverage of MADS in 1991 is over 1.9 times.
 Balance sheet indicators are also strong. Over the past five fiscal years, McLean has spent close to $60 million on property, plant and equipment while reducing long-term debt by $2 million and increasing unrestricted cash to $12 million from $2 million.
 Credit concerns center on the hospital's ability to manage continuing changes in treatment modality and its payor mix. Over the past five years, the hospital has dramatically reduced its average length of stay for Blue Cross and commercial pay patients in response to stricter utilization review procedures intended to reduce inpatient hospitalization. Over the same period, inpatient utilization increased by Medicare and Medicaid patients, which presently account for a manageable, but increasing, 33 percent of total 1991 patient days.
 With a wide range of treatment alternatives to inpatient hospitalization, McLean has the flexibility to further reduce length of stay while continuing to deliver high quality, focused patient care. This places McLean in a very strong competitive position with cost-conscious third party payors and managed care plans and will enable the hospital to sustain the strong demand for inpatient and outpatient services.
 -0- 2/21/92
 /CONTACT: Fred Martucci, 212-908-0554 or Andy Matteis, 212-908-0501/ CO: Massachusetts Health and Educational Facilities Authority ST: Massachusetts IN: HEA SU: RTG SM -- NY025 -- 1362 02/21/92 11:44 EST
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Publication:PR Newswire
Date:Feb 21, 1992
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