Published on July 19, 2022

Outlook Stable: Fitch Ratings Affirms Silver Cross Revenue Bonds at 'A-'

Citing Silver Cross Hospital’s commitment to quality, historically strong financial performance, and market dominance, Fitch Ratings has affirmed the “A-“ Issuer Default Rating of Silver Cross  Heath System in New Lenox.

Fitch also affirmed the “A-” revenue bond rating on about $336 million of series 2008A and 2015C bonds issued by the Illinois Finance Authority on behalf of Silver Cross.

“Silver Cross benefits from a large independent and employed medical staff and several affiliations with leading Chicago area health systems,” Fitch noted in its report. “The hospital has successfully ramped up its open-heart and cardiac surgery program, capturing about 25 percent market share in the total service area, compared to 9 percent in fiscal 2019.”

Fitch pointed to Silver Cross’ Level III neo-natal intensive care unit expected to be operational by August 2022, which, they said, “should enhance Silver Cross' already leading share for obstetrics services. Management continues to focus on growth through increasing access points and enhancing key service lines. The formation of a multispecialty physician group that has grown to 40 practitioners should help to continue to grow market share.”

100 Top Hospital logo 2022In addition, Silver Cross recently was named to the 2022 Fortune/Merative 100 Top Hospitals® list. This is the 10th time Silver Cross has been recognized with this honor as one of the top performing hospitals in the U.S. The annual list – which recognizes excellence in clinical outcomes, operational efficiency, patient experience, and financial health -- was published by Fortune. 

Financially, the report continued, Silver Cross has demonstrated strong operating cost flexibility during the pandemic with operating margins averaging about 15.5 percent over the past three years. Strong margins reflect the efficiencies of operating in a relatively new facility, combined with Silver Cross's labor and productivity practices. 

Through fiscal 2021, utilization rebounded to pre-pandemic levels in most services, the report noted. However, a third spike in coronavirus cases in the second quarter of fiscal 2022 created a very challenging operating environment with the hospital's highest COVID-19 census since the pandemic began, with occupancy running at over 100 percent.

“Our Fitch rating is a testament to the strength and resilience of our organization, especially as we’ve navigated the two-year-long COVID-19 pandemic,” explains Silver Cross Hospital President and Chief Executive Officer Ruth Colby. “It’s also a reflection of our unwavering commitment to quality, prudent management of our financial resources and focus on the future.” 

Fitch expects the outlook for Silver Cross to improve during the next five years. Its five-year forward-looking scenario analysis shows “operating margins rebounding following the softer 2022 driven by strong demand following the pandemic related disruption, and supported by Silver Cross's strategic outpatient growth, improved access, and the strength of their core service lines.” 

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Physicians on Silver Cross Hospital’s Medical Staff have expertise in their areas of practice to meet the needs of patients seeking their care. These physicians are independent practitioners on the Medical Staff and are not the agents or employees of Silver Cross Hospital. They treat patients based upon their independent medical judgment and they bill patients separately for their services.