Prime Healthcare Achieves Credit Rating Upgrades from Fitch, Moody’s, and S&P, Reflecting Strong Financial and Operational Performance
Prime Healthcare Services, Inc. has earned significant recognition from all three major credit rating agencies—Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings—marking a major milestone in the company’s financial trajectory. The recent upgrades underscore the health system’s improved operational efficiency, robust financial performance, and strategic expansion efforts, particularly following its acquisition of six hospitals in Illinois earlier this year.
On the ratings front, Fitch Ratings upgraded Prime Healthcare’s senior secured notes to ‘B+’, citing a combination of stronger performance metrics, operational improvements, and reduced debt leverage. Moody’s raised the company’s corporate credit rating to B2, pointing to notable gains in profitability and operational discipline. Meanwhile, S&P Global Ratings affirmed Prime’s existing rating but improved its outlook from stable to positive, indicating the potential for a future upgrade if performance trends continue.
One of the Largest Health Systems in the Nation
Prime Healthcare is recognized as one of the largest health systems in the United States, operating 51 hospitals across 14 states and managing more than 360 outpatient locations. The organization’s workforce includes over 57,000 employees and affiliated physicians committed to delivering high-quality, value-based healthcare.
Eighteen of Prime’s hospitals operate under the Prime Healthcare Foundation, a 501(c)(3) not-for-profit public charity dedicated to preserving healthcare access in communities across the country. The foundation’s hospitals have also seen rating improvements, with Fitch upgrading their Issuer Rating and Revenue Bond Credit rating to A- in April 2025—its third upgrade in four years.
Factors Driving the Upgrades
The latest credit rating actions were driven by a combination of operational and financial improvements, as well as strategic growth initiatives. Rating agencies pointed to several key factors:
- Improved EBITDA and Margins: Prime Healthcare has demonstrated a material increase in EBITDA and EBITDA margins in recent quarters, a reflection of cost containment, stronger patient volumes, and operational efficiencies.
- Reduced Reliance on Temporary Labor: The system has significantly cut its use of contract labor, which had previously driven up expenses.
- Disciplined Expense Management: Across its network, Prime has implemented cost-saving measures, including lowering leasing expenses and streamlining hospital operations.
- Successful Hospital Turnarounds: Prime’s ability to acquire and revitalize underperforming or distressed hospitals has been a consistent strength, creating value and improving access to care in underserved areas.
- Geographic Diversification: The March 2025 acquisition of six Illinois hospitals from Ascension Health Alliance expanded Prime’s footprint and reduced geographic concentration risks.
- Increased Scale: The Illinois acquisition has bolstered patient volumes and service capabilities, adding momentum to Prime’s operational and financial growth.
Agency-Specific Observations
Each rating agency highlighted different aspects of Prime Healthcare’s performance and prospects:
- Fitch Ratings specifically noted the “performance improvements at the Chicago hospitals, positive trends in the base business, and leverage reduction.” The agency viewed these improvements as indicators of sustained operational success and prudent financial management.
- Moody’s Investors Service praised Prime’s “material improvement of the company’s EBITDA and EBITDA margin” and recognized its “track record of turning around distressed hospital assets.” Moody’s also pointed to Prime’s reduced temporary clinical labor expenses, decreased leasing costs, and optimization of underperforming hospitals as key achievements. The agency further emphasized the benefits of geographic diversification from the Illinois acquisition, which will materially reduce geographic concentration risks.
- S&P Global Ratings acknowledged stronger patient admissions and a notable decline in contract labor costs. The agency noted that the increased scale from the Illinois hospitals is expected to deliver incremental EBITDA growth, stronger operating results, and reduced adjusted leverage. S&P’s positive outlook reflects the “increased likelihood of an upgrade if the company successfully integrates the Ascension hospitals and achieves base case expectations.”
Leadership Perspective
Steve Aleman, Chief Financial Officer of Prime Healthcare, credited the ratings upgrades to the company’s disciplined approach and strategic investments:
Prime’s recent upgrades from all three major rating agencies are a direct reflection of our strong financial performance, operational discipline, and strategic growth. Prime’s continued growth is matched by its steadfast focus on delivering exceptional care and advancing clinical outcomes. Our expansion into the Chicago market and continued focus on delivering high-quality care have positioned us for sustainable, long-term success.
Aleman underscored that the Illinois acquisition is not just a growth move but a way to bring Prime’s proven hospital turnaround model to more communities, reinforcing the system’s mission of improving healthcare access and quality.
Consistent Recognition for Quality and Social Responsibility
Beyond its financial performance, Prime Healthcare has earned consistent national recognition for clinical excellence, health equity, and value-based care. In the 2025 Lown Institute Hospitals Index, 46 Prime hospitals received “A” grades for social responsibility, placing them among the nation’s leaders in health equity, patient outcomes, and value of care.
The Lown Institute’s evaluation covers more than 3,500 hospitals nationwide, assessing performance across measures that reflect a hospital’s real-world impact on its community. Prime’s high marks reflect its ability to balance quality patient outcomes with equitable care delivery, particularly in diverse and underserved regions.
Mission-Driven Healthcare
Sunny Bhatia, MD, President and Corporate Chief Medical Officer of Prime Healthcare, emphasized that the organization’s mission extends far beyond financial metrics:
“Social responsibility, clinical excellence, and health equity are central to our unique mission of saving and strengthening hospitals across the nation. We are honored to serve our communities and grateful to our caregivers for their compassion, excellence, and integrity in every patient encounter.
Dr. Bhatia noted that Prime’s growth strategy aligns closely with its mission—strengthening hospitals ensures that communities retain vital access to care, particularly in areas where hospital closures could have devastating effects on public health.
