Fitch Ratings Upgrades Ochsner Health System’s Bond Outlook To A- Positive

NEW ORLEANS – Fitch Ratings has upgraded its financial outlook on Ochsner Health System to an A- Positive, up from BBB+, while Moody’s Investors Service upheld its current positive rating of Baa1.

         The improvement in Fitch Ratings reflects the organization’s financial strength and expanded regional footprint. According to Fitch’s report, “The upgrade reflects Ochsner’s transformation from a New Orleans based hospital to the largest integrated health system in Louisiana, with more than 1,000 employed physicians. Ochsner is a leading referral center for health care services, with regional referrals and patient discharges from more than 25 miles away from New Orleans, growing by double digits each year from 2012 to 2015.”

         In addition, Finch noted the following factors for its improved rating:

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• Strong System Growth: The 'A-' rating incorporates Ochsner’s lower operating risk profile due to its growing regional footprint and large base of employed physicians, which allows for greater variance to 'A' category medians and peers. Ochsner’s regional referral strategy continues to see growth as well. Regional referrals increased by 35% in 2015 over 2014, building on a period from 2010 to 2014, when regional transfers grew by about 20% a year. In addition, discharges from patients more than 25 miles away grew by 10%, in 2015 over 2014.


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• Performance Improvement Sustained: Ochsner showed financial improvement for the third consecutive year. This was the strongest financial results over the four-year historical period. Further supporting the strong performance is a number of efficiency initiatives that Ochsner has undertaken to manage expenses. Ochsner management reports margin improvement of $26 million in 2015 and $54 million in 2014 due to these efforts. These initiatives have helped to blunt the effect of Medicaid cuts that Ochsner has absorbed over the years.


         Moody’s positive outlook is due to “Ochsner's improved financial performance with a record level of cash flow and margins in unaudited Fiscal Year 2015, organic growth and new strategic partnerships throughout the state. The Baa1 also acknowledges improved liquidity. Ochsner has demonstrated a core competency with its various partnerships which should enable a smooth execution of its aggressive growth strategies.”

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         Ochsner Health System is Louisiana’s largest non-profit, academic, healthcare system. Driven by a mission to Serve, Heal, Lead, Educate and Innovate, coordinated clinical and hospital patient care is provided across the region by Ochsner's 28 owned, managed and affiliated hospitals and more than 60 health centers. Ochsner is the only Louisiana hospital recognized by U.S. News & World Report as a “Best Hospital” across six specialty categories caring for patients from all 50 states and more than 80 countries worldwide each year. Ochsner employs more than 17,000 employees and over 1,000 physicians in over 90 medical specialties and subspecialties, and conducts more than 1,000 clinical research studies.

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