The downgrade is the result of several factors, including the health system’s material operating loss and budget shortfall in fiscal year 2016, lower than anticipated liquidity and significant risks associated with large systems consolidations.
The negative outlook reflects Moody’s Investors Service’s view of the system’s weak margins, absence of a longer track record of improved performance and short-term risks associated with continued consolidation and liquidity disruptions from major IT implementation.
Regarding the rating downgrade, EMHS said, “While EMHS is disappointed with Moody’s decision, it will not affect care delivery, business operations, or our ongoing focus on performance improvement. Additionally, while EMHS has no plans to enter the bond market for any additional debt for the foreseeable future, we look forward to revisiting our rating with Moody’s next year.
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