Here are four things to know about the rating action and the organization’s outlook.
1. The rating affirmation is supported by a number of factors, including the hospital’s strong balance sheet and its history of achieving favorable underlying operating margins (excluding the California State Provider Fee), according to Moody’s.
2. Valley Children’s Hospital’s strengths are undergirded by a strong market position as the only standalone, high-end tertiary children’s hospital in California’s central valley.
3. The hospital also faces challenges, which were considered for the rating assignment, such as extremely high exposure to Medi-Cal, the California Medicaid program, which accounted for 76 percent of gross revenues in 2014, and comparatively narrow diversification of revenue streams.
4. Valley Children’s Hospital’s outlook is stable, which reflects Moody’s expectation of “ongoing good operating performance and the maintenance of strong balance sheet measures.”
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