Second consecutive upgrade earned by operational performance, liquidity and commitment

Fitch Ratings has upgraded Prime Healthcare Foundation's (PHF) Issuer Rating and the Revenue Bond Credit rating to BBB+ and Outlook as Stable for its 14 not-for-profit hospitals in six states. The credit rating upgrade by Fitch is the second credit rating upgrade given by the rating agency to PHF in the last three years.

Fitch attributed the upgrade to BBB+ rating and the Stable Outlook to PHF's material improvement in operating results in FY23 further strengthened by PHF's very good liquidity and moderate leverage. Fitch noted that the FY23 results were a result of a combination of stronger volumes reflected in increased discharges, ED visits and outpatient surgeries that drove a 13.1% increase in operating revenues coupled with a smaller than anticipated 6.7% rise in operating expenses. Helping to control expenses was a 44% decrease in contract labor expenses that was driven by PHF's implementation of a labor taskforce in early 2022 that focused on recruitment, retention, productivity, nursing preceptorships, virtual education and more efficient onboarding.

"This rating action is a result of a thorough evaluation of Prime Healthcare Foundation's operations, financial position, and local market conditions. The conclusion from Fitch Ratings is based on our performance despite national challenges such as labor costs and inflationary pressures," said Steve Aleman, Prime Healthcare's Chief Financial Officer. "The stable outlook reflects Prime Healthcare Foundation's financial growth and stability that positions the Foundation to continue thriving while never losing focus on the mission of providing quality care to the communities it serves."

"This second consecutive rating upgrade reflects confidence in the Foundation's operational performance, financial stability and ongoing success as we honor our mission," said Kavitha Bhatia, MD, president and chair of Prime Healthcare Foundation. "We are grateful to the dedicated teams across the nation that make our commitment to communities possible every day as we provide clinically excellent, compassionate care and expand access for all."

Prime Healthcare and Prime Healthcare Foundation comprise 44 hospitals and more than 300 outpatient locations in 14 states, serving over 2.6 million patients annually. Prime is one of the nation's leading health systems recognized for its quality, patient safety and performance. This year, Prime's hospitals received more than 200 clinical quality awards from Healthgrades, and Prime has more Patient Safety Excellence Award recipients from Healthgrades than any other health system for eight consecutive years. Its hospitals have also been recognized among the "100 Top Hospitals" in the nation 68 times by Fortune/Merative (formerly IBM Watson Health). In addition, Prime has been recognized by The Joint Commission and National Quality Forum with the prestigious John M. Eisenberg Patient Safety and Quality Award. Prime's mission is to provide compassionate, quality care for all and ensure access for which it has been recognized by the Lown Institute for health equity, value and clinical excellence.

About Prime Healthcare and Prime Healthcare Foundation: Prime Healthcare and Prime Healthcare Foundation comprise an award-winning health system operating 44 hospitals and more than 300 outpatient locations in 14 states, providing over 2.6 million patient visits annually. Fourteen of the Prime Healthcare hospitals are members of the Prime Healthcare Foundation, a 501(c)(3) not-for-profit public charity. Prime is one of the nation's leading health systems with nearly 45,000 employees and physicians dedicated to providing the highest quality healthcare. Based in Ontario, California, Prime Healthcare is nationally recognized for award-winning quality care and has been named a Top 10 and Top 15 Health System by IBM Watson Health. To learn more, please visit www.primehealthcare.com.

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