Fitch affirms MSHA’s bond rating at BBB+, outlook stable


JOHNSON CITY, Tenn. – Fitch Ratings announced recently that the agency has affirmed Mountain States Health Alliance’s (MSHA) bond rating at BBB+, with a stable outlook.

According to Fitch, “The rating affirmation reflects MSHA’s continued solid financial performance. Good financial performance has been driven by MSHA’s strong market position and focus on cost efficiencies.”

A study completed in 2011 by the East Tennessee State University (ETSU) College of Business and Technology found that MSHA as a whole has a positive $1.3 billion economic impact annually on the region. The capital investments and job creation cited in ETSU’s report are made possible by MSHA’s continued financial stability.

“Part of our mission of bringing loving care to health care is being good stewards of our financial resources,” said Marvin Eichorn, MSHA’s senior vice president and chief financial officer. “When we lower costs and make sensible investments, we strengthen not only our health system, but also the surrounding economy.”

Despite operating on a narrow margin of 1.9 percent, MSHA maintains a solid cash flow, which Fitch praised in its report: “Operating cash flow has consistently been outstanding and is one of the highest in Fitch’s portfolio with a 15.7 percent EBITDA (earnings before interest, taxation, depreciation and amortization) margin in fiscal 2011 compared to the BBB category median of 8.5 percent.”

According to Fitch, “Solid operating performance has been driven by good volume and management’s continued focus on cost initiatives, which include Lean practices. Management has been diligent in eliminating duplicative services and consolidating activities with the growth of the system.”

MSHA leaders expect to see even greater cost efficiencies over the next several years as all facilities in the system become integrated onto a common technology platform for electronic medical records. The new EMR system, which has already begun implementation in Southwest Virginia, is expected to reduce duplication of tests and procedures, enhance patient safety, and streamline the continuum of care, resulting in greater convenience for both patients and caregivers. 

About Mountain States Health Alliance

Mountain States Health Alliance, a not-for-profit health care organization based in Johnson City, Tenn., operates a family of hospitals serving a 29-county, four-state region (Northeast Tennessee, Southwest Virginia, Southeastern Kentucky and Western North Carolina). MSHA offers a large tertiary hospital, several community hospitals, two critical access hospitals, rehabilitation, a children’s hospital, a behavioral health hospital, home care and hospice services as well as a comprehensive medical management corporation. Its 13,500 team members, associated physicians and volunteers are committed to its mission of bringing loving care to health care. For more information, visit

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