Partners' overall margin is unchanged. Partners' overall margin is unchanged. Bond-rating agencies have maintained that all of these costs are operating expenses.
Partners says only part of the corporate costs are operating expenses.
Peter Markell, Partners vice president for finance, said the organization previously excluded corporate expenses from its operating costs, partly because chief executives at the individual hospitals wanted their institutions judged on their own merits and performance when compared to hospitals across the country. That portion of corporate costs is seed money from investment returns earmarked for various projects, including mental health services and patient safety programs, Markell said. If these programs become permanent parts of the operating budget, they will be considered operating expenses, he said. Fitch disagree, although they acknowledge that Partners' accounting preferences are allowed under general accounting principles. But as hospital margins became more volatile and more scrutinized during the 1990s, Fitch and other rating agencies have tried to report results in a consistent manner across the industry.