The ratings on debt issued for Trinity Health, Mich. reflect the benefits of the merger between Holy Cross and Mercy Health Services (affirmed at 'AA-' with this review). These benefits include a well-thought-out management and merger implementation plan, increased geographic dispersion of risk, reduced corporate overhead costs, and a healthy balance sheet. Although the closure of Mercy Hospital in Detroit severely diminished profitability in 2000 due to onetime expenses, it also serves as an example of strong management's willingness to prune dilutive assets. However, the system is vulnerable to weak performance in several markets, which, in turn, have recently depressed combined system operating performance. Additionally, management will be challenged to effectively integrate a geographically disperse, national health care system with
