JOHNSON CITY, Tenn., May 27, 2022 (GLOBE NEWSWIRE) — Days after Fitch Ratings issued its “A” rating on Ballad Health’s credit, Standard and Poor’s released its own report, concluding that it upholds the rating. “A-” credit rating from Ballad Health with a stable outlook.
The S&P Global Ratings report cites both Ballad Health’s pre-pandemic performance in its execution of the merger between Mountain States Health Alliance and Wellmont Health System, as well as its assessment of Ballad Health’s performance during and after the pandemic.
Performance of Ballad Health governance and management related to the merger and the pandemic
“In our view, Ballad has an experienced management team that has responded well to the challenges of the pandemic and has taken a proactive and purposeful approach to the merger that includes developing a strong strategic vision, setting financial and non-financial explicit, executive alignment and functional leadership, integration of cultures and leveraging best practices for integration,” the S&P Global Ratings report said. “In addition, we believe that the management is making tough decisions about the need to consolidate services across the system and improve quality and performance, while maintaining access across the region.”
“Before the pandemic, Ballad had delivered positive operating performance in fiscal 2019 as management made progress on many fronts and was active in implementing cost reductions and efficiencies to maintain positive operations. “, adds the report.
The report cites that Ballad Health achieved health care cost savings exceeding $194 million, noting that Ballad Health has reduced the cost of health care for Appalachia.
“The S&P report comprehensively examined the financial and non-financial performance of Ballad Health before and during the pandemic, and concluded that Ballad Health has, in fact, reduced healthcare costs for our region by executing the strategies that we established in 2017 and complying with the terms set out by the states in our merger agreements,” said Ballad Health President and CEO Alan Levine. “The Board has been effective in its governance and oversight of this complex process, and the results are objectively clear. Ballad Health delivered on its promise to reduce costs and improve quality. We remain committed to this in the future.
In its report, S&P Global cites some headwinds the hospital industry is facing due to the pandemic that are impacting Ballad Health.
“In our view, partially offsetting rating factors include our assessment of Ballad’s near-term uncertainty of the pace of rebound in business volume, and likely elevated labor expense pressures. and supplies, and its challenging payer mix with a slightly declining commercial mix, including reliance on government payers and heavy reliance on special purpose financing. The pandemic and rising costs have resulted in recent financial pressures that may persist in the short term,” the report states.
“With all the pressure on our team members over the past two years, the Board of Directors and management team at Ballad Health have made the decision to invest heavily in our frontline team,” said Levine said. “We have increased salaries by more than $120 million and invested more than $100 million in the use of contract labor to cope with the workload caused by the outbreaks of COVID-19, combined with significant national staffing shortages. Our Board of Directors also approved the investment of over $30 million in the development of 13 child care centers for our team members to utilize and expand our employee assistance programs. And our Board of Directors has authorized several bonuses for frontline team members worth more than $20 million in appreciation for the hard work and commitment shown by our Ballad Health family. Clearly, we recognize that our greatest asset is our Ballad Health family of 13,000 members, and we are committed to continuing to address their needs as they serve our region.
In addition to the direct investment in team members, the Ballad Health Board of Directors has authorized a $10 million investment to establish the Appalachian Highlands Center for Nursing Advancement at East Tennessee State University. This investment was underscored by the support of the Tennessee Legislature and Governor, who matched it with an annual commitment of $1 million to transform the center into the Tennessee Center for Nursing.
The S&P Global report factors in increases in salaries paid to team members and nursing support in its analysis of continued salary cost pressure.
“On behalf of the Board of Directors, I can say unequivocally that our goal is to ensure that our team members provide the highest quality care to the people who entrust their care to us, and we believe that investments what we do in our team member well-being is critical,” said Independent Lead Director David Lester. “If we support our team properly, we believe that will result in the achievement of our mission.”
The Standard and Poor’s report is attached and available here.
More information about Ballad Health is available at www.balladhealth.org.
About Ballade Santé
Ballad Health is an integrated community health improvement organization serving 29 counties in the Appalachian Highlands of northeastern Tennessee, southwestern Virginia, northwestern North Carolina and southeastern east of Kentucky. Our system of 21 hospitals, post-acute care and behavioral health services, as well as a large multi-specialty group medical practice, work closely with an active independent medical community and community stakeholders to improve the health and the well-being of almost a million people. By leading the adoption of value-based payments, addressing health-related social needs, funding clinical and health systems research, and committing to long-term investments in strong children and families in our region, Ballad Health strives to become a national model for rural health and health care. Learn more at www.BalladHealth.org.
Ashlea Ramey Ballad Health 423-863-2383 [email protected]