Hospitals Could Face Cut in Credit Rating : Finances: A $10-million loss risks AA rating of Long Beach, Laguna Hills facilities’ parent company.

A dramatic downturn in Long Beach Memorial Medical Center’s finances has prompted Standard & Poor’s to warn the hospital’s parent corporation that its credit rating could be lowered.

Standard & Poor’s, the agency that rates the credit-worthiness of companies and governments that issue bonds, recently placed Memorial Health Services on credit watch “to flag the market that something is going on,” Director Cara Bowers said.

Memorial Health Services, the parent corporation of the Long Beach hospital and Saddleback Memorial Medical Center in Laguna Hills, posted a net loss of $10 million during the 1991-92 fiscal year. By comparison, the hospitals and their related foundations and companies posted a net income of $18 million during 1990-91.

“In the hospital business, that’s dramatic,” Bowers said.

Standard & Poor’s has not yet decided whether it will lower Memorial’s AA bond rating, Bowers said. That decision is expected after officials from the bond rating agency meet with Memorial’s managers next month, she said.

Traditionally, Memorial has been “financially, a very strong institution,” Bowers said. About 35 hospitals in the country have AA bond ratings, she said.

But Memorial’s finances have been hurt by the recession, competition from more economical health maintenance organizations and advances in medical technology that allow more people to be treated as outpatients, said Rick Graniere, Memorial Health Services senior vice president for finances. Last year, the number of patients decreased by about 12%, he said.

“We’ve definitely been experiencing some operating difficulties,” Graniere said. “(But) we have taken a lot of steps in reversing the trend.”

The Long Beach hospital laid off 187 employees last year, and Saddleback laid off 120, Long Beach Memorial spokesman Ron Yukelson said. In addition, both hospitals reduced their staffs by eliminating 1,131 additional spots through attrition, he said.

Long Beach Memorial Medical Center, with 4,224 full-time and part-time employees, is one of the city’s largest employers.

Graniere said the hospitals have enough cash to cover their debts. Although figures are not available for December, he said he expects Memorial Health Services to post a profit for the month.

“Having a double-A credit rating has been a pride of ours, and we certainly hope we can maintain that,” Graniere said.