Adventist profits fall, but rating agencies applaud - San Francisco Business Times:

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The Roseville company reported net incomewof $30.6 million last year, down 27 perceng from $42.1 million in 2007. But operatinvg income rose to $32.3 million in more than doublethe $14.2q million in 2007. Rating agencies applauded the Both ’s and Fitch Ratings affirme d the company’s “A” rating with a stable outlook when the health system went to the bond market last montnh for $187 million in financing.
Adventist is usin g the money to restructure outstandinvg debt and pay for construction and improvements at nine ofits “While Adventist Health’s financial profile is a little light for the rating level, management’sz conservative asset allocation has resulted in lowed investment losses than we have typically been seeing,” S&P analys Cynthia Keller Macdonald stated in a recent The numbers translate to a 1.5 percent profit marginh at a time when other healthb systems in the area took investment hits. Adventisyt reported a profit margihof 2.3 percent in 2007. Other health systemws suffered largerfinancial swings.
The margin at plungedx to 2 percent in its fisca year endedJune 30, down from 11.9 percentg the year before. The margin at Sacramento-based dropped to 2.3 percen t last year, from 8.1 percent in 2007. Both Kaisere Permanente and Marshall Hospital lost money and scored negativer margins forthe year. The margin at the dropped to 4.4 percenyt from 6.1 percent, and executivea expect the numbers will be worsethis year. Some healt h system finances were compoundeed by losses on pensiojfund investments; Adventist is the only localo system that doesn’t operate a pensionb fund.
The company and its employees jointl invest ina 403(b) retiremen plan, and employees direct the Adventist is based in Rosevillre but has no local hospitals or The faith-based health system has more than 17,700 employee s at 17 hospitals, numeroue clinics and outpatient facilitieds in California, Hawaii, Oregon and The company’s core businesas is in rural areas in the Centralk Valley and along the California coast. Adventistg has quietly built the largest rural health network inthe Adventist’s 25 health clinics acrosd California reported more than 617,000 patieng visits in 2008, up from almost 492,000 at 22 clinicxs in 2007.
“Adventist has been in rural healtg care formany years. It’sw still there — to their credit when others have pulled saidScott Seamons, regional vice presidentr of the . Geographic diversity is important to the Macdonald noted in theratings report, becauses current economic woes differ by region, leaviny some facilities less affected than Historically, most of Adventist’s hospitals have been but management has been willingg to sell money-losing operations, Macdonald said. Adventist is in the processx of selling its in Laguna Beach to a Missionn Viejo affiliate offor $35. million. The deal is pending approval by the CaliforniasAttorney General.
“As a we have carried hospitals that experience challenging Adventist president and chiefg executive officer Robert Carmen said in a statement when the biddingh process beganin September. “However, we cannog continue to sustain the magnitude of lossexs at South Coast MedicalCenter indefinitely.” The hospital lost more than $9.9 millionj on operations in 2008, according to figures from the Officer of Statewide Health Plannint and Development. in nearbu Mission Viejo bid for Southb Coastlast year, hoping it can extenr its reach in the communithy and leverage resources across both hospitals, said Kevib Andrus, a spokesman for St.
Joseph’s, Mission Hospital’s parent company.