The one-notch upgrade to “Aa3” also reflects strong clinical offerings, favorable revenue growth and strong physician relationships, the agency said. The outlook at the new grade was revised to stable from positive.
While high levels of capital spending are anticipated, the system should be able to maintain its strong cash metrics. El Camino Health will also need to face the challenge of replacing its Los Gatos hospital location by the end of the decade, Moody’s said.
The upgrade news follows a move from Fitch Ratings Feb. 27 that revised the system’s outlook to positive.
The health system, which operates two campuses at Los Gatos and Mountain View with a total of 443 beds, also operates 11 outpatient clinics in an affluent area. El Camino Health faces local competition from Stanford University Hospital, Oakland, Calif.-based Kaiser Permanente and Sutter Health-affiliated Palo Alto Medical Foundation, according to Moody’s.
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