Community Health Systems, a Houston-based chain of 40 hospitals in 17 states, reported a 94% gain in net income to $12.1 million, or 61 cents per share, for the first quarter ended March 31, compared with $6.2 million, or 40 cents per share, in the year-ago period. Revenues grew 21% to $142.1 million. The profit growth reflects the chain's $161 million acquisition of Hallmark Healthcare Corp., an Atlanta-based rural hospital chain, last October.
Standard & Poor's Corp.'s provisional A- rating on San Bernardino County (Calif.) certificates of participation, issued to finance a medical center project, has been placed on CreditWatch. The $283 million in certificates is secured by the county's lease rental payments for a medical center to be built in Colton, Calif. A lawsuit was filed March 9 in California Supreme Court against the county, its board of supervisors and the California Office of Statewide Health Planning and Development. The San Bernardino County Taxpayers Association and other plaintiffs seek a temporary restraining order and an injunction to stop the project. Meanwhile, the New York credit-rating agency has raised its bond rating on $90 million in debt at Lee Memorial Hospital, Fort Myers, Fla., to A+/A-1 from A/A-1. The upgrade reflects the hospital's steadily improving liquidity, solid market position, stable demand and profitability. The agency also upgraded its rating on Memorial Hospital and Medical Center of Cumberland (Md.) to A from A-. The higher rating, affecting $25.3 million in debt, signals the hospital's consistent financial performance and strong market share.
Standard & Poor's Corp., signaling the potential for a default, downgraded to CCC from B its debt rating for Michigan Health Care Corp. The Detroit-based health system filed for Chapter 11 reorganization on March 31. The New York agency said the reasons given for the bankruptcy filing included several adverse litigation settlements, pending settlements and other litigation expenses. Michigan Health missed a March loan payment of $1.2 million and doesn't have adequate reserves, Standard & Poor's said. The downgrade affects some $123 million of debt.