A $100 million Epic implementation for Lifespan, Rhode Island’s largest health system has resulted in eroding cash flow and bond rating, according to Moody’s Investors analysts. The rating agency gave the health system a negative financial outlook and downgraded their rating to Baa2- only two levels away from junk status, Modern Healthcare reports.
The $100 million investment has impacted Lifespan’s operating margin and is projecting 2.8% operating cash flow margin for fiscal 2014 with a predicting operating margin around -1.7%. These numbers are not expected to improve until 2016, one year after the projected Epic EHR go-live date of spring 2015.
“The thin performance provides little cushion during a period of increased capital spending and the installation of a new IT system with short-term implementation risks that could disrupt cash flow,” the report said (Herman, Modern Healthcare/6/5/14).
