Butler Memorial Hospital as seen on Friday, May 10, 2024. Morgan Phillips/Butler Eagle

A forecast from one credit rating agency indicates Butler Health System’s finances are trending in the right direction.

Fitch Ratings issued a report on Tuesday, Dec. 2, revising its “rating outlook” for Butler Health System from negative to “stable,” indicating the agency is seeing continued financial improvement and it does not expect Butler Health’s bond rating to change in either direction anytime soon.

The outlook improvement comes off the heels of last month’s announcement Independence Health System, the parent of Butler Health System, had signed a letter of intent to merge with West Virginia University Health System.

Although Fitch adjusted its outlook for Butler Health System, it did not change the actual bond rating, which remains at BB+. Fitch last adjusted its rating for Butler Health System to BB+ from its previous rating of BBB- in December 2024.

“The rating affirmation and revision to a stable outlook reflect BHS’s improving operating performance and its expectations for continued improvement in fiscal year 2026,” the Fitch report reads. “The stable outlook is further supported by the recent nonbinding letter of intent from West Virginia University Health System.”

“We are pleased that the Fitch rating outlook is revised to stable, which reflects the trajectory of our improving operating performance, as well as the letter of intent with West Virginia University Health System,” said Tom Albanesi, chief financial officer for Independence Health, in a statement.

Although Butler Health System merged with Westmoreland County-based Excela Health at the start of 2023 to form Independence Health System, the two halves of Independence continue to file separate financial reports and are rated separately by rating agencies.

Fitch’s outlook change comes weeks after Independence Health posted the financial results for Butler Health System for the three-month period between July and September 2025.

The numbers indicate that Butler Health System sustained a loss of $3.58 million for the quarter, a slight improvement over the $3.83 million loss from the same period 12 months ago.

While revenues have risen from $112.82 million over last year’s quarter to $121.37 million in this year’s quarter, an increase in expenses, from $119.15 million to $126.32 million, has almost totally offset the gain.

“The increase in expenses was due to increased fringe benefits, as well as increased utilization of locum tenens (temporary, or fill-in) physicians due to vacancies,” the report reads.

Overall, Butler Health has sustained losses of $14.77 million over the last 12 months ending Sept. 30. This is actually up from the loss from the previous 12-month period, in which they lost only $14.4 million.

“While we have significantly improved our financial performance over the past three years, it remains a work in progress,” Albanesi said. “The rising cost of labor is a challenge industrywide, and one that is contributing the most to cost containment. We remain focused on high quality patient care and financial improvement every day, and the anticipated affiliation with West Virginia University Health System has not changed that focus.”