NEW BRUNSWICK — Saint Peter’s University Hospital in New Brunswick is facing an "unexpectedly large operating loss" this year that could lead to a lower credit rating in 2011, according to a report by Standard & Poor’s Rating Services today. The ratings company downgraded the hospital’s credit outlook from "stable" to "negative." Moody’s Investor Service also changed the 478-bed...
St. Peter's Hospital in New Brunswick in this 2008 photo.NEW BRUNSWICK — Saint Peter’s University Hospital in New Brunswick is facing an "unexpectedly large operating loss" this year that could lead to a lower credit rating in 2011, according to a report by Standard & Poor’s Rating Services today.
The ratings company downgraded the hospital’s credit outlook from "stable" to "negative."
Moody’s Investor Service also changed the 478-bed teaching hospital’s credit outlook from stable to negative Thursday.
The losses are mitigated somewhat by the state awarding more charity care funding, and the hospital’s decision to reduce wages and benefits and restructure management, according to Standard & Poor’s report.
These actions help, but "the negative outlook reflects our uncertainty about whether these actions taken to date will be sufficient," according to the report.
Ronald C. Rak, president and chief executive officer of Saint Peter’s Healthcare System, described the losses as "emblematic of the poor economic climate and negative balance sheets reported by hospitals throughout New Jersey."
"Fortunately, Moody’s and Standard & Poor’s also recognized that we have taken strong organizational steps to position our business for improvement by next year," Rak said.