Here are three things to know about the rating action and the hospital’s outlook.
1. The rating affirmation was based on a number of positive factors, according to Moody’s, including LMH’s track record of good operating performance, favorable liquidity and debt coverage ratios, distinctly leading market share in a quality service area and status as a component unit of the city of Lawrence, meaning government officials are financially accountable for LMH,.
2. The hospital reported 12 percent adjusted operating cash flow margin in fiscal year 2014.
3. The hospital also faces challenges, which were considered for the rating affirmation. For instance, LMH is a small size for an “A1” rated credit and close enough to Kansas City, Mo., and Topeka, Kan., to face some degree of competition, according to Moody’s.
4. The hospital’s outlook is stable, which reflects Moody’s expectation “that LMH will continue to generate good operating margins, sustain strong liquidity and debt coverage ratios and maintain its distinctly leading market position.”
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