Moody's Investors Service has affirmed the "A3" bond rating assigned to Cherry Hill, N.J.-based Kennedy Health System's $65.1 million in debt and revised the system's outlook to positive from stable.
The rating affirmation was based on Kennedy Health's consistently improving financial performance. The system's operating cash flow margin grew from 10.7 percent in fiscal year 2013 to 13.5 percent through the first nine months of FY 2014.
The rating affirmation and outlook revision was also supported by the health system's low debt load, location in an area with high population growth and its lower proportion of uninsured patients.
The health system also faces some challenges, which were considered for the rating affirmation, such as its high percentage of Medicare revenue (roughly 50 percent) compared to the national median (44 percent), and its relatively low unrestricted cash and investments, as measured by days cash on hand.