By Janice Early, VP Marketing & Communications
Lawrence Memorial Hospital has received affirmation of its A1 bond rating from Moody’s Investors Service in New York.
The Moody's report, issued June 10, reaffirmed the rating, which the hospital has had since 2012. LMH Chief Financial Officer Joe Pedley said affirmation of the rating sends a positive message about the hospital’s financial picture.
Joe Pedley
“This is great news and reflects the efforts of all associated with LMH to manage the hospital in a cost-effective and highly successful manner," Pedley said in a press release from the hospital.
In the report, Moody’s noted the A1 rating reflects LMH’s track record of good operating performance, favorable financial ratios, status as part of the city of Lawrence with its strong credit rating, and distinctly leading market share in a quality service area. Offsetting these favorable characteristics, the Moody’s report pointed out that LMH is small for an A1 credit rating and is near enough to Kansas City and Topeka to face competition from hospitals in those areas.
LMH is among the smallest A1 rated hospitals by Moody’s with just under $190 million operating revenues in 2014 compared with the A1 median of $938 million.
In 2012 Moody’s upgraded the hospital’s credit rating from A2 to A1. Moody's Investors Service has 10 levels of investment-grade, long-term ratings, ranging from a high of Aaa down to Baa3. Many hospitals and health systems sit within the three subcategories of A ratings: A1, A2 and A3.
Pedley said the announcement was especially noteworthy given the fact that Moody’s issued a report in December that said the outlook for the United States nonprofit health care sector remains negative for 2015. According to that report, growth in operating cash flow will be weak, operating margins will continue to narrow, and revenue growth will remain limited for the sector.
