Moody's Investors Service has raised its debt ratings on several hospitals and healthcare systems to Baa1 from Baa. Franciscan Sisters of the Poor Health System, New York, was upgraded because of its steadily improving financial performance. Since 1990 operating cash flow has risen 60% and cash on hand has increased four-fold. The Baa rating applies to $163.8 million in debt. Another upgrade affected $119.5 million in debt issued by the obligated group that includes Shady Grove Nursing and Rehabilitation Center, Rockville, Md.; Shady Grove Adventist Hospital, Rockville, Md.; and Washington Adventist Hospital, Takoma Park, Md. The upgrade reflects a turnaround strategy implemented by its corporate parent, Adventist HealthCare MidAtlantic Corp., recently renamed Columbia Union. The system is better aligned to compete and has improved its liquidity, Moody's said.
Health Care Capital Finance said it provided more than $90 million in financing during the first half of 1995. The total includes $36.4 million in mortgage financing for 10 separate nursing homes in California, Georgia, Illinois, Maryland, Massachusetts and Washington. The Atlanta-based firm also participated in a $24.8 million corporate financing for Southern Health Corp., a hospital and nursing home management company. During the six-month period, the company also increased a previously funded $23 million corporate finance and development facility by $18 million and served as financial adviser on an $11.5 million financing secured by two retirement housing developments in the Southeast.
SunHealth Alliance has reduced the number of drug distributors with which it contracts to one key vendor and two supplemental firms. It expects the move to cut members' distribution costs by $10 million over three years. The program took effect July 1. Under the arrangement, SunHealth's 250 hospital members can select the preferred vendor, AmeriSource Corp., or two "authorized" distributors, Cardinal Health and Bergen Brunswig Corp. The firms distributed about 90% of the more than $500 million in products purchased annually through SunHealth pharmacy contracts. Three other firms had distributed the remaining purchases. With the new contracts, SunHealth plans to expand the use of electronic data interchange and develop new programs to manage inventory.
Hewlett-Packard Co. took a 14% equity stake worth $61 million in Princeton, N.J.-based i-Stat and announced it would incorporate the automated blood analysis products of i-Stat into Hewlett-Packard's line of patient-monitoring systems. The strategic alliance is aimed at expanding the development and distribution of i-Stat's biosensor technology for worldwide markets, according to Hewlett-Packard, which makes computing, communications and measurement products and provides related services. The company initially will target Europe, Africa and the Middle East for introduction and marketing of i-Stat's handheld blood analyzer, which can perform basic tests at the point of care using a few drops of blood.
American Health Properties said it has purchased two skilled-nursing facilities in Denver for $8.9 million. The facilities, which have a total of 264 beds, have been leased to affiliates of Signature HealthCare Corporation of Denver, a private company with nine nursing homes in Colorado and Arizona. Denver-based AHP has investments in 27 healthcare facilities.