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Who’s up and who’s down

DOWN
Legacy Health System; Portland, Ore.
Rating:
A1
Outlook: Stable
Affected debt: $308 million
Agency: Moody’s Investors Service
Remarks: Downgraded from Aa3 but revised outlook from negative to stable. Declines in liquidity contributed to weaker financial profile, as did larger than expected $27 million loss in 2006 at new Salmon Creek Hospital. New system chief executive officer came aboard in 2006.

UP
Blount Memorial Hospital; Maryville, Tenn.
Rating:
Baa1
Outlook: Positive
Affected debt: $24 million
Agency: Moody’s Investors Service
Remarks: Hospital’s share in county increased from 63 percent to 65 percent while No. 2 provider declined to 15 percent. Four larger hospitals and health systems operate approximately 15 miles away in the Knoxville area, but have not penetrated BMH’s market.

UP
Iowa Health System; Des Moines, Iowa
Rating:
Aa3
Outlook: Stable
Affected debt: $495 million
Agency: Moody’s Investors Service
Remarks: Iowa’s largest health system with a three-year record of growing operating cash flows thanks to volumes and rate increases.

DOWN
Memorial Hospital at Gulfport; Gulfport, Miss.
Rating:
A2
Outlook: Negative
Affected debt: $95.1 million
Agency: Moody’s Investors Service
Remarks: Continuing difficulties related to Hurricane Katrina fallout. Admissions in the first nine months of 2006 declined 9.3 percent compared to 2005. Management predicts operating cash flow in 2006 will fall 23 percent.

—Philip Betbeze