Ratings firm improves KershawHealth outlook, downgrades bond rating

KershawHealth Board of Trustees meet in 2013 to discuss financial situation
KershawHealth Board of Trustees meet in 2013 to discuss financial situation

KERSHAW COUNTY, SC (WIS) - The financial situation at Kershaw Health could be improving.

Fitch Ratings upgraded its outlook for KershawHealth from negative to stable this week. But the global rating agency also downgraded KershawHealth's bond rating from BBB+ to BBB.

In April, the healthcare system's board of trustees approved a strategic plan to improve the system's finances. Administrators say they are working on the improvements now, including signing contracts regarding emergency department management and developing a joint replacement center.

"Like community hospitals across the county, KershawHealth is facing challenges arising out of the shift from inpatient admissions to outpatient care; reductions in reimbursements from Medicare, Medicaid, and private insurance; inflation of costs for supplies and drugs; rising copayment costs for patients; and increases in bad debt and charity care," reads a statement from KershawHealth.

One year ago, Kershaw Health trustees said they expected the system to lose $5 million over the next five years if changes to the way it operates were not made.

"The decision by Fitch to change KershawHealth's outlook to stable reflects in good part the fact that we have developed and are implementing a comprehensive strategic plan," said spokesperson Joseph Bruce.

"Like community healthcare systems all across the country, we continue to face financial challenges. But we believe our initiatives to reduce cost, continuously improve the quality of care we provide, and enter into key strategic partnerships will all put us in a position to adjust to these changes and in the end serve our community even more effectively."

Administrators also blame South Carolina's decision not to expand Medicaid under the Affordable Care Act.

"South Carolina's decision not to expand Medicaid adds an additional financial burden for hospitals in the state," the statement says. "In fact, a new report from Fitch predicts non-profit hospitals in states that have chosen not to expand Medicaid will experience increasing financial challenges in 2014, and in years to come, while hospitals in states that have expanded Medicaid have already begun to realize the benefits of increased insurance coverage."

The Board of Trustees is asking the public for its suggestions on the strategic plan.

Board Chair Karen Eckford and CEO Terry Gunn will be available on Monday mornings from 10 to 10:15 a.m. to answers questions about the strategic plan. Appointments can be made by calling 803-713-6228.

Trustee board meetings will be held at different locations around the county. The Oct. 27 meeting will be held at KershawHealth's Outpatient and Urgent Care Center in Elgin. The Feb. 23 meeting will be held at the Woman's Club in Bethune. All other meetings will continue to be held at the Health Resource Center on Battleship Road in Camden.

Also Eckford, Gunn, and other Trustees will be available between 5 and 5:30 p.m. before each board meeting to answer questions about the strategic plan. And once a quarter when the board meets at locations around the county, Town Hall Meetings will be scheduled at 5 p.m. prior to the regular Trustees meeting. These are informal opportunities for dialogue and will not replace the more formal public comment time that is part of the board's regular agenda.

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