Photo from Catholic Health Systems.
Colorado-based Catholic Health Initiatives saw its credit rating cut this week when Standard & Poor’s dropped it from a A+ to an A over first quarter losses.
The drop affects more than $7 billion in debt held by CHI, one of the country’s largest health systems.
S&P said its decision came after the health system posted a $137.4 million loss in the first quarter of 2015 despite pulling in $3.2 billion in revenue. According to the S&P report, CHI lost $641 million in fiscal 2014.
The health system has faced several challenges, S&P said, including an expensive rollout of electronic health records and costs tied to health reform, particularly in CHI’s Kentucky market. In its recent quarterly report, CHI said it saw charity care jump by 20 percent, and total uncompensated care hit $910 million.
Utilization has also been mostly flat in 2014 for the health system, with acute admissions hovering between 119,000 and 124,000 a quarter and outpatient visits around 1.7 million each quarter.
The Denver Post reported that CHI plans to lay off 1,500 workers across its 105 hospitals, about 1.7 percent of its staff.
S&P said it expected some of the system’s integration and consolidation efforts to improve CHI’s fiscal health in 2014, but it faced high costs in other areas, particularly information technology costs in Kentucky.
CHI, which runs hospitals in 18 states, claims to treat more than 46 million people in its network, or 17 percent of U.S. population.