Einstein Health's debt is downgraded

Fitch Ratings downgraded $133 million in Einstein Health Network debt to BBB+ from A-, citing weakening financial results caused largely by a high percentage of poor patients.

The rating remains investment grade, and Fitch revised its outlook on Einstein - which is building a $355 million medical center in East Norriton in a bid to capture wealthier, better-insured patients - to stable from negative. Fitch said it does not rate the roughly $309 million in outstanding debt being used to build that facility.

"The rating change reflects industry trends in declining profitability, the challenges of a weak economy, continued pressures from third-party payers, and the potential impact of health care reform," said Gerard Blaney, Einstein's chief financial officer.

All of Einstein's debt has fixed interest rates, which means the downgrade will not force it to pay more for current debt. In the six months ended Dec. 31, Einstein had an operating loss of $6.8 million on $518 million of operating revenue in the six months ended Dec. 31.

   - Harold Brubaker