LANCASTER — The Antelope Valley Healthcare District, which runs Antelope Valley Hospital (AVH), recently received a Ba2 rating from Moody’s Investors Service, a downgrade from the previous rating of Baa3.
In a statement released Wednesday, hospital officials said the downgrade does not reflect on AVH’s ability to maintain current obligations to employees, hospital operations or payments to bond holders.
The downgrade is an opportunity to administer improvements and transform challenges into achievements, hospital officials said. Read the hospital’s statement below:
Moody’s recognizes the hospital’s operational challenges given the fact that the hospital provides $75.8 million in charity care, bad debt and unpaid cost of public programs according to our Fiscal Year 2013 financial audit (that was up approximately 10% over Fiscal Year 2012).
Like all 45 district hospitals throughout California, AVH relies on supplemental government funding to offset charity care. Those payments are made specifically to offset the cost of unpaid or low pay services.
Hiring Dennis Knox as permanent Chief Executive Officer to lead a cohesive management team is viewed as a strength by Moody’s. AVH’s “favorable market position and supplemental funding” were also recognized as positive attributes for the district.
“The management team is holding all departments and systems accountable so we can extract expenses while improving patient care and operations,” said Dennis Knox, AVH Chief Executive Officer. “We have already implemented significant measures to ensure the hospital achieves sustainable results as quickly as possible.”
One system being applied is a program that streamlines the staffing decisions and adjusts staffing to the fluctuating daily needs. The hospital is also reviewing physician preference supply costs, evaluating purchased services contracts and installing a new payroll system, all of which present opportunities for cost savings.
This action by Moody’s should not alter the high level of service and professionalism that the hospital prides itself on offering to the greater Antelope Valley community.