Straight TalkA weekly update from management on the issues that matter most. Jan 17, 2019 Validation from credible third parties gives everyone comfort. NCH respects the agencies that rate its quality and financial strength. Both of these attributes are interconnected—strong financials drive better quality and vice-versa. NCH is transparent and professional as we serve our community. Earlier this week, Moody’s Investors Service upgraded NCH Healthcare System to A1 Stable from A2, affecting $91.635 million in revenue bonds issued through Collier County Industrial Development Authority. Moody’s states that, “The A1 reflects our expectation that NCH Healthcare System, Inc. (FL) will maintain its distinctly leading market position in the economically favorable service area of Naples. Strong and growing utilization and higher acuity services will support continued strong financial performance and ample debt service coverage. Fundraising will remain a core competency and is expected to provide some of the funding of future capital, along with cash flow. The A1 also reflects a lower debt position following the recent repayment of one-quarter of the system’s debt. Even with the use of internal reserves for the repayment, liquidity metrics remain strong. Persistent challenges will include high Medicare exposure, seasonal volume trends, and a very competitive operating environment in Collier County and Lee County.” Similarly, Fitch’s most recent upgrade in April 2018 assigned an “AA-” bond rating to NCH, up from an “A+”. Even though “A+” sounds better, “AA-” ranks higher. Fitch’s comments are, “. . . driven by a strong financial profile assessment under Fitch’s ‘U.S. Not-for-Profit Hospitals and Health System Rating Criteria,’ . . . which indicates that NCH maintains solid profitability and a strong net leverage position through the cycle, despite a stressed scenario where economic and investment performance is negatively impacted.” U.S. News and World Report recently ranked NCH 11th among healthcare systems in Florida, with high performance in seven categories: Bypass Surgery, Congestive Health Failure, Total Hip Replacements, Total Knee Replacements, Chronic Obstructive Pulmonary Disease, Colon Cancer, and Abdominal Aneurisms. NCH has risen from a 3 star system in 2016 to 4 star in 2017 and 5 star in 2018—the top ranking from the Centers for Medicare and Medicaid (CMS). Of the seven categories, safety of care, readmissions, and efficient use of imaging are standard deviations better than the other 4,000+ rated hospitals. Mortality, timeliness of care, and effectiveness of care are similar to other systems. However, we have been addressing the weakest of our CMS ratings, namely patient experience. www.medicare.gov/hospitalcompare/search.html In March 2018 we looked ahead to the 2019 CMS ratings, anticipating a return to 4 star status due to stagnant patient satisfaction. We anticipate missing the top category by 0.0052 of a point. To change the system in some way to return to the top, we piloted patient-centered care using unit-based hospitalists in three of twelve medical/surgical units. The data used by CMS for 2019 will all be prior to March, 2018; thus, the new pilot data is not included in the February 2019 CMS release. Healthcare is a sophisticated and complicated business. When done well, excellent healthcare helps everyone live a longer, happier, and healthier life. P.S. DO YOU HAVE A COLLEAGUE OR FRIEND WHO WOULD BE INTERESTED IN UPDATES? Please enter their email address at nchmd.org/straighttalk, and we will add them to our complimentary mailing list.