Before Watauga Medical Center merged with two other hospitals to form the Appalachian Regional Healthcare System, the 117-bed rural North Carolina facility had historically maintained a strong 5% operating margin and a comfortable amount of cash on hand.
But soon after, the system ended a year $10 million in the red with a bank’s noose tight around its neck and the collapsing credit markets pulling it tighter.
To thrive in its newly systemic configuration, ARHS would have to improve its internal operations and convince an increasingly skeptical external market of its rediscovered strength and stability. The efforts resulted in an investment-grade rating for the rural system and a more affordable new debt structure designed to be easily adaptable to future system needs.
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