S&P downgraded ChristianaCare’s credit rating
The ratings agency said the nonprofit health system, which recently ended plans to merge with Virtua Health, remains financially strong.
ChristianaCare, Delaware’s largest health system, received a one-notch credit-rating downgrade from Standard & Poor’s, to “AA” from “AA+’.
S&P attributed the downgrade of the nonprofit health system’s rating to inconsistent operating performance in recent years and the planned addition of $350 million in debt early this year through a bond offering, according to a report Tuesday.
In the year ended June 30, 2025, ChristianaCare’s financial results were weaker than expected because of low surgical volume related to physician turnover, S&P said. Another factor was higher-than-anticipated medical malpractice reserves, S&P said.
One of ChrisitianaCare’s financial strengths is that it typically gets half of its revenue from private insurers, which pay higher rates and are more profitable than Medicare and Medicaid, S&P noted.
Despite its strong financial condition, ChristianaCare has a relatively small service area, given its concentration in northern Delaware, compared to other health systems with “AA” ratings, S&P said. If ChristianaCare’s expansion into Southeastern Pennsylvania is successful, it would help alleviate that problem, the agency said.
ChristianaCare opened a micro-hospital in western Chester County last summer and is building a second one in Aston, Delaware County. It also has plans to put one in Springfield Township. In addition, ChristianaCare spent $50 million to step into the leases that the bankrupt Crozer Health had at five outpatient facilities in Broomall, Glen Mills, Media, and Havertown.
S&P said ChristianaCare has no plans for significant acute-care hospital expansion.
Last month, ChristianaCare and Virtua Health, South Jersey’s largest health system, ended negotiations on a possible merger.