Standard & Poor's said deteriorating finances at West Penn Allegheny Health System prompted a credit downgrade to B- from B+.
West Penn Allegheny reported an operating loss of $23.9 million on revenue of $409.1 million during the third quarter, recently released unaudited financial statements
The rating could change in the next 12 months, depending on what happens with the health system's proposed acquisition by insurer Highmark
, the rating agency said. The deal must be approved by Pennsylvania's insurance department, and Standard & Poor's may lower West Penn Allegheny's rating without quick approval or a financial turnaround, analysts wrote.
West Penn Allegheny said in a statement that the system has recently made progress (PDF)
, which the downgrade apparently overlooked. The rating agency's move “is extremely disappointing and oddly timed in light of the recent progress at the West Penn Allegheny Health System,” the statement said.
The report “overemphasizes” comparison of financial performance from one year to the next, West Penn Allegheny said.