The 'AA-' rating assigned to Trinity Health, Mich.'s debt, which previously had been Holy Cross Health System debt, originally rated 'AA', reflects 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 will severely diminish 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
