The outlook revision was based on a number of factors, including AEHN’s consistently weak margins. While the system’s operating cashflow improved in fiscal year 2014, it is still below 6 percent, as it has been for the last three years.
The outlook revision was also supported by the AEHN’s two-year budget shortfalls, decline in admissions, competitive service area and dependence on disproportionate share payments.
The health system also boasts some strengths, which were considered for the rating assignment, such as its strong reputation, fixed rate debt and no-interest rate derivatives.
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